<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 15, 1996
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
AMYLIN PHARMACEUTICALS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 33-026609
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
9373 TOWNE CENTRE DRIVE
SAN DIEGO, CALIFORNIA 92121
(619) 552-2200
(ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
RICHARD M. HAUGEN
PRESIDENT AND CHIEF EXECUTIVE OFFICER
AMYLIN PHARMACEUTICALS, INC.
9373 TOWNE CENTRE DRIVE
SAN DIEGO, CALIFORNIA 92121
(619) 552-2200
(NAME, ADDRESS, INCLUDING ZIP CODE AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
<TABLE>
<S> <C>
THOMAS A. COLL, ESQ. ALAN DEAN, ESQ.
COOLEY GODWARD LLP DAVIS POLK & WARDWELL
4365 EXECUTIVE DRIVE, SUITE 1100 450 LEXINGTON AVENUE
SAN DIEGO, CA 92121 NEW YORK, NY 10017
(619) 550-6000 (212) 450-4000
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
AMOUNT MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(2) FEE
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Common Stock, $.001 par
value....................... 1,725,000 shares $12.9375 $22,317,188 $6,763
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(1) Includes 225,000 shares that the Underwriters have the option to purchase
solely to cover over-allotments, if any.
(2) Estimated in accordance with Rule 457(c) solely for the purpose of computing
the amount of the registration fee based on the average of the high and low
prices of the Registrant's Common Stock as reported on The Nasdaq National
Market on October 10, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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<PAGE> 2
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.
Subject to Completion, Dated October 15, 1996
PROSPECTUS
1,500,000 SHARES
LOGO
COMMON STOCK
---------------------------
All of the 1,500,000 shares of Common Stock offered hereby are being sold
by Amylin Pharmaceuticals, Inc. ("AMYLIN" or the "Company"). The Company's
Common Stock is quoted on the Nasdaq National Market under the symbol "AMLN." On
October 11, 1996, the last reported sale price for the Company's Common Stock on
the Nasdaq National Market was $13.00. See "Price Range of Common Stock."
Johnson & Johnson Development Corporation, one of the Company's
collaborative partners and an existing stockholder, has committed to purchase an
aggregate of $15,000,000 of shares of Common Stock in a private placement at the
public offering price (estimated to be 1,153,846 shares assuming a public
offering price of $13.00 per share) (the "Johnson & Johnson Shares"). The sale
of the Johnson & Johnson Shares by the Company will not be registered in this
Offering, and such shares will be purchased upon the closing of this Offering.
See "Business -- Johnson & Johnson Collaboration" and "Underwriting."
At the request of the Company, the Underwriters have reserved $900,000 of
the shares offered hereby (estimated to be 69,230 shares assuming a public
offering price of $13.00 per share) for sale at the public offering price to
directors and executive officers of the Company. See "Underwriting."
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS," BEGINNING ON PAGE 6.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
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Price to Underwriting Discounts Proceeds to
Public and Commissions(1) Company(2)
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<S> <C> <C> <C>
Per Share................................ $ $ $
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Total(3)................................. $ $ $
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</TABLE>
(1) For information regarding indemnification of the Underwriters, see
"Underwriting."
(2) Before deducting expenses of the Offering payable by the Company, estimated
at $250,000.
(3) The Company has granted the Underwriters an option, exercisable within 30
days from the date hereof, to purchase up to 225,000 additional shares of
Common Stock on the same terms as set forth above, solely to cover
over-allotments, if any. If such option is exercised in full, the total
Price to Public will be $ , the Underwriting Discounts and
Commissions will be $ and the Proceeds to the Company will be
$ . Including the Johnson & Johnson Shares, the total Proceeds to
Company will be $ , or $ if the Underwriters
over-allotment option is exercised in full. See "Underwriting."
---------------------------
The shares of Common Stock offered by the Underwriters are subject to prior
sale, receipt and acceptance by them and subject to the right of the
Underwriters to reject any order in whole or in part and to certain other
conditions. It is expected that delivery of such shares will be made through the
offices of UBS Securities LLC, 299 Park Avenue, New York, New York, on or about
, 1996.
---------------------------
UBS SECURITIES
HAMBRECHT & QUIST
VECTOR SECURITIES INTERNATIONAL, INC.
October , 1996
<PAGE> 3
LOGO
PRODUCT DEVELOPMENT PIPELINE
PRAMLINTIDE AS AN ADJUNCT TO INSULIN
Injectable in vials
Injectable in vials, suitable for mixing
with insulin in syringes
Injectable in cartridges, single
cartridge pen injector
Injectable in cartridges, dual cartridge
pen injector (with insulin)
Buccal, in lozenge form
Pulmonary, for inhalation
Nasal, for inhalation
Jet injector, for injection without
needles
Transdermal, by iontophoresis patch
Oral, non-peptide
PRAMLINTIDE AS PRIMARY THERAPY
Improved glucose control in Type II
diabetic patients unresponsive
to oral hypoglycemic agents and who are
not using insulin therapy
NON-AMYLIN METABOLIC TARGETS
Exendin: for glucose control in diabetes
GLP-1: for glucose control in diabetes
Modulation of fat metabolism
DEFINITIONS:
- - DISCOVERY: Activities aimed at discovering novel ligands, receptors or
otherwise biologically active molecules that can be targeted to intervene in
disease processes.
- - SELECTION: Activities aimed at designing and screening for potential drug
candidates.
- - VALIDATION: Activities aimed at demonstrating in whole animal models relevant
therapeutic effects of potential drug candidates.
- - DELIVERY: Activities aimed at developing chemical and mechanical systems for
administering drug candidates to patients.
- - PRECLINICAL: Activities aimed at filing an Investigational New Drug
application to permit initiation of human clinical trials, including
pharmacokinetic studies and preclinical toxicology.
- - PHASE I: Activities aimed at demonstrating short-term safety and tolerability
of a drug candidate in human volunteers.
- - PHASE II: Activities aimed at demonstrating relevant therapeutic effects of a
drug candidate in patients with disease.
- - PHASE III: Activities aimed at establishing for a drug candidate statistical
proof of therapeutic efficacy, long-term safety, tolerability, compliance with
Good Manufacturing Practices, labeling and marketing claims, and contents of
regulatory filings.
- - REGISTRATION: Activities aimed at preparing for market launch while awaiting
regulatory approval to market a drug candidate.
- - MARKETING: Activities aimed at commercializing a drug following regulatory
approval.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
IN CONNECTION WITH THIS OFFERING, CERTAIN UNDERWRITERS OR THEIR AFFILIATES
MAY ENGAGE IN PASSIVE MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE
NASDAQ NATIONAL MARKET, IN THE OVER-THE-COUNTER MARKET OR OTHERWISE IN
ACCORDANCE WITH RULE 10B-6A UNDER THE SECURITIES EXCHANGE ACT OF 1934. SEE
"UNDERWRITING."
<PAGE> 4
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements including the notes thereto contained
elsewhere in this Prospectus or incorporated herein by reference. This
Prospectus contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ materially from the
results discussed in the forward-looking statements. Factors that could cause or
contribute to such differences include, without limitation, those discussed in
the sections entitled "Risk Factors," "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and "Business," as well as those
discussed elsewhere in this Prospectus or incorporated herein by reference.
Unless otherwise indicated, all information in this Prospectus assumes that the
Underwriters' over-allotment option is not exercised. As used in this
Prospectus, references to "Johnson & Johnson" include Johnson & Johnson and its
wholly-owned subsidiaries LifeScan, Inc. and Johnson & Johnson Development
Corporation, or any one of such entities.
THE COMPANY
Amylin Pharmaceuticals, Inc. ("AMYLIN" or the "Company") is focused on
developing novel therapeutics for treating people with diabetes and other
metabolic disorders. The Company is conducting a series of Phase III clinical
trials of its lead drug candidate, pramlintide, which is being developed to
improve glucose control in people with Type I (juvenile-onset) and Type II
(maturity-onset) diabetes who use insulin, a patient population estimated by the
Company to comprise 7 million people in major pharmaceutical markets. In June
1995, AMYLIN entered into a worldwide collaboration with Johnson & Johnson to
develop and commercialize pramlintide. In August 1996, the Company achieved the
first milestone in the collaboration when, based upon an administrative interim
review of three-month glycated hemoglobin ("HbA1c") data from the first two,
one-year Phase III clinical trials, Johnson & Johnson decided to continue the
collaboration. By the closing of this Offering, Johnson & Johnson will have made
payments to AMYLIN totaling $80.0 million. In addition, Johnson & Johnson has
committed to provide significant, additional financial support for the
development and commercialization of pramlintide, subject to the terms of its
agreement with the Company. Assuming successful Phase III clinical trials, the
Company plans to apply for marketing approval of pramlintide in North America
and Europe by the end of 1998. Any profits or losses from the collaboration will
be shared equally between AMYLIN and Johnson & Johnson. Since its inception, the
Company has spent almost $200 million building its integrated drug discovery and
development expertise, and, with its lead drug candidate now well advanced in
clinical development, AMYLIN is broadening its research to develop new drug
targets for treating metabolic disorders, including diabetes, obesity and
dyslipidemia.
Diabetes is a major global health problem which is inadequately treated by
available drugs. The hallmark of diabetes is excessively high blood glucose, and
the estimated seven million people with diabetes in the major pharmaceutical
markets rely on insulin therapy to help control their blood glucose. However,
most people with diabetes cannot maintain their blood glucose concentrations
near the normal range with insulin alone. Even modest improvements in glucose
control can result in significant reductions in the risk of degenerative
complications such as blindness, kidney failure and nerve damage. In addition,
many authorities believe that abnormally high blood glucose concentrations play
a role in the development of heart disease. Consequently, the Company believes
that a new drug which could safely help people with diabetes improve their
glucose control would be of great therapeutic benefit.
Pramlintide is an analog of human amylin, a hormone which in healthy
individuals is believed to work in concert with insulin in controlling glucose
metabolism. Amylin secretion is missing or deficient in many people with
diabetes, an abnormality which the Company believes contributes to poor glucose
control, especially after eating. To test whether replacing the actions of
amylin, along with insulin, could be beneficial compared to the use of insulin
alone, the Company has conducted extensive preclinical and clinical studies of
pramlintide, including 18 Phase I and II clinical trials involving over 1,000
people with diabetes who use insulin. The results to date are encouraging: in
seven-out-of-seven Phase II studies assessing glucose control, pramlintide
caused a statistically significant and clinically relevant reduction in blood
glucose. These studies evaluated a progression of different endpoint assessments
of glucose control including reduction in post-meal glucose concentrations,
24-hour average glucose concentrations and fructosamine concentrations.
Fructosamine is a surrogate marker
3
<PAGE> 5
which reflects average glucose concentrations over the two-to-three weeks prior
to testing. To date, pramlintide has been well tolerated at anticipated
therapeutic doses and there have been no clinically important safety concerns.
The principal endpoint for the Company's Phase III clinical trials of
pramlintide is a reduction in HbA1c. HbA1c is a widely accepted, chemically
measured index of glucose control which closely correlates with 24-hour average
blood glucose concentrations, according to several published medical studies.
Also, changes in fructosamine have been reported to mirror subsequent changes in
HbA1c when the improvement in glucose control is maintained over time.
Consequently, assuming the short-term glucose-lowering results demonstrated in
the Phase II studies translate into long-term efficacy as evidenced by a safe,
clinically relevant and statistically significant reduction in HbA1c in Phase
III trials, the Company believes pramlintide should be approvable as a drug to
improve glucose control in people with diabetes who need insulin therapy.
Johnson & Johnson's ongoing financial commitment to AMYLIN under the
pramlintide collaboration includes the funding of 50% of development costs and
100% of pre-launch marketing costs (AMYLIN's one-half share to be repaid over
time from future profits), as well as milestone payments, license fees, equity
investments, and a loan facility for use in certain circumstances. The Company
will apply all of the license fees, any cash milestone payments and 50% of the
proceeds from Johnson & Johnson's equity investments towards its share of
pramlintide development expenses. AMYLIN continues to lead the global
development and registration of pramlintide and, if marketing approval is
obtained, Johnson & Johnson will take the lead in commercialization.
A continuing priority of the Company is to expand the potential use of
pramlintide by improving the convenience of drug administration and researching
potential additional indications. AMYLIN plans to launch pramlintide in
pre-filled cartridges for use in specially designed pen injectors. As part of
its Phase III trials, AMYLIN is conducting studies to confirm that the most
popular formulations of insulin can be mixed with pramlintide in the same
syringe just prior to injection. The Company is also researching the possibility
of dual cartridge injector pens (for injecting insulin and pramlintide
simultaneously) and non-needle routes of administration, including buccal (in
lozenge form), pulmonary (for inhalation), transdermal (by patch), nasal and jet
injector. The Company also is examining whether pramlintide can safely and
effectively control post-meal blood glucose concentrations in people with Type
II diabetes who are unresponsive to oral hypoglycemic agents and who are not
using insulin therapy.
In addition, AMYLIN is broadening its research base beyond the study of
amylin to include research of new drug targets for treating metabolic disorders,
including diabetes, obesity and dyslipidemia (a condition characterized by
unhealthy levels of cholesterol and triglycerides). The Company's experience and
expertise gained in exploring the biology and chemistry of amylin and several
amylin-related compounds in clinical testing is directly applicable in these
efforts. For example, AMYLIN has acquired exclusive rights to certain patents
and patent applications relating to exendin (a newly discovered compound derived
from the venom of the Gila monster lizard) and glucagon-related peptide (GLP-1),
which the Company plans to evaluate as potential new diabetes therapies. The
Company is also in discussions with other third parties to collaborate on new
technologies and/or in-license other metabolic compounds.
The Company was incorporated in Delaware in September 1987. Unless the
context otherwise requires, "AMYLIN" and the "Company" refer to Amylin
Pharmaceuticals, Inc., a Delaware corporation, and its European subsidiary,
Amylin Europe Limited. The Company's executive offices are located at 9373 Towne
Centre Drive, San Diego, California 92121, and its telephone number is (619)
552-2200.
4
<PAGE> 6
THE OFFERING
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Common Stock Offered by the Company........... 1,500,000 shares
Johnson & Johnson Shares...................... 1,153,846 shares(1)
Common Stock Outstanding after this
Offering.................................... 30,851,198 shares(2)
Use of Proceeds............................... To fund Phase III development of pramlintide,
research and development, and other general
corporate purposes.
Nasdaq National Market Symbol................. AMLN
</TABLE>
SUMMARY CONSOLIDATED FINANCIAL DATA
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
-------------------------------------------------------- --------------------
1991 1992 1993 1994 1995 1995 1996
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<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues under collaborative
agreements.................... $ 167 $ 667 $ 667 $ 500 $ 17,045 $ 9,066 $ 10,730
Expenses:
Research and development...... 7,532 15,368 18,988 30,255 39,337 20,023 25,791
General and administrative.... 2,013 2,834 4,387 6,383 8,318 4,133 4,275
------- -------- -------- -------- -------- -------- --------
9,545 18,202 23,375 36,638 47,655 24,156 30,066
Net interest income............. 261 2,612 2,195 1,637 1,341 313 999
------- -------- -------- -------- -------- -------- --------
Net loss........................ $ (9,117) $(14,923) $(20,513) $(34,501) $(29,269) $(14,777) $(18,337)
======= ======== ======== ======== ======== ======== ========
Net loss per share.............. $ (0.76) $ (0.87) $ (1.15) $ (1.71) $ (1.23) $ (0.69) $ (0.65)
======= ======== ======== ======== ======== ======== ========
Shares used in computing net
loss per share................ 12,029 17,111 17,867 20,185 23,854 21,490 28,084
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996
--------------------------
ACTUAL AS ADJUSTED(3)
--------- --------------
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term investments............................. $ 39,552 $ 79,710
Working capital............................................................... 27,896 68,054
Total assets.................................................................. 48,501 88,659
Notes payable and obligation under capital leases, less current portion....... 3,702 3,702
Accumulated deficit........................................................... (135,655) (128,655)
Total stockholders' equity.................................................... 31,942 72,100
</TABLE>
- ---------------
(1) Concurrent with this Offering, the Company is selling $15.0 million of
shares of Common Stock (1,153,846 shares, based on an assumed public
offering price of $13.00 per share) to Johnson & Johnson at the public
offering price. The sale of the Johnson & Johnson Shares by the Company will
not be registered in this Offering.
(2) Based on shares of Common Stock outstanding as of June 30, 1996 and assuming
the issuance of the Johnson & Johnson Shares. Excludes 6,991,951 shares
reserved for issuance under the Company's stock option plans, of which
4,658,636 shares of Common Stock were subject to outstanding options as of
June 30, 1996 at a weighted average exercise price of $6.44 per share. See
"Capitalization."
(3) Adjusted to give effect to the receipt of the net proceeds from the sale of
the 1,500,000 shares of Common Stock offered hereby (at an assumed public
offering price of $13.00 per share and after deduction of estimated
underwriting discounts and commissions and estimated expenses payable by the
Company in connection with the Offering), and the sale of the Johnson &
Johnson Shares. Also adjusted to give effect to the receipt of a $7.0
million milestone-related payment from Johnson & Johnson in August 1996.
Does not include the receipt of a $7.4 million advance in development
funding from Johnson & Johnson in September 1996.
5
<PAGE> 7
RISK FACTORS
Prospective investors in the shares of Common Stock offered hereby should
carefully consider the following risk factors, in addition to the other
information appearing in this Prospectus.
The discussion in this Prospectus contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from the results discussed in the forward-looking statements. Factors
that could cause or contribute to such differences include, without limitation,
those discussed in the sections entitled "Risk Factors," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business," as well as those discussed elsewhere in this Prospectus or
incorporated herein by reference.
Technological Uncertainty; Reliance on Single Drug Candidate in Clinical
Development. All of the Company's products are in research or development, and
no revenues have been generated from product sales. To date, the Company's
resources have been dedicated primarily to the research and development of
potential pharmaceutical products relating to the amylin hormone to treat
metabolic disorders. The physiology of fuel metabolism is highly complex, and
the causes of metabolic disorders, such as diabetes, are not fully known.
Although preclinical and Phase II clinical data support the Company's belief
that amylin plays an important role in the regulation of metabolism, there can
be no assurance that the Company's theories are correct or that its product
candidates will be effective in the treatment of metabolic disorders. While the
Company has conducted Phase II dose ranging and preliminary efficacy studies of
pramlintide up to one month in duration, results obtained in preclinical and
early clinical studies are not necessarily indicative of results that will be
obtained during Phase III clinical testing.
Pramlintide is the only product candidate that the Company currently has in
human clinical studies. The Company's research and development programs other
than pramlintide are at an early stage. Any additional product candidates will
require significant research, development, preclinical and clinical testing,
regulatory approval and commitments of resources prior to commercialization.
There can be no assurance that the Company's research will lead to the discovery
of any additional product candidates or that pramlintide or any such potential
products will be successfully developed, prove to be safe and efficacious in
clinical trials, meet applicable regulatory standards, be produced in commercial
quantities at acceptable costs or be marketed successfully. If pramlintide does
not successfully complete clinical testing and meet applicable regulatory
requirements or is not successfully marketed, the Company may not have the
financial resources to continue research and development of other product
candidates. See "Business -- Pramlintide: The Drug Candidate" and "-- Other
Research and Development Activities."
Reliance on Johnson & Johnson. The Company is dependent on future payments
from Johnson & Johnson to continue the development and commercialization of
pramlintide. The Company will apply all of the license fees and cash milestone
payments and at least 50% of the proceeds from Johnson & Johnson's equity
investments towards the Company's share of pramlintide development expenses.
Under the collaboration agreement between Johnson & Johnson and the Company,
Johnson & Johnson has primary responsibility for commercializing pramlintide.
There can be no assurance that Johnson & Johnson will be able to establish
effective sales and distribution capabilities or be successful in gaining market
acceptance for pramlintide or that Johnson & Johnson will devote sufficient
resources to the commercialization of pramlintide. If Johnson & Johnson desires
to discontinue the collaboration, it can terminate the collaboration agreement
with the Company, subject to notice of six months. Johnson & Johnson's financial
and other obligations would continue during the six-month period following the
receipt of any such termination notice. In addition, Johnson & Johnson has the
right to terminate the collaboration agreement at any time based on material
safety or tolerability issues. If Johnson & Johnson were to discontinue its
financial support, the Company might not be able to continue the pramlintide
development program, and the Company's financial condition would be materially
adversely affected. If adequate funds were not available from other sources, the
Company would be required to implement a restructuring plan and to delay,
scale-back or eliminate one or more of its research or development programs. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources" and "Business -- Johnson &
Johnson Collaboration."
6
<PAGE> 8
Uncertainty Associated with Clinical Trials; Government Regulation. Prior
to marketing, any drug developed by the Company must undergo rigorous
preclinical and clinical testing and an extensive regulatory approval process
mandated by the United States Food and Drug Administration ("FDA") and
equivalent foreign authorities. Subject to compliance with applicable
regulations, the Company plans to undertake extensive clinical testing to
demonstrate optimal dose, safety and efficacy for its product candidates. The
Company has initiated adequate and well controlled Phase III efficacy studies on
the Company's first product candidate, pramlintide. In the Phase III studies,
the Company is testing whether treatment with pramlintide along with insulin can
lower glycated hemoglobin (HbA1c), a widely accepted, chemically measured index
of glucose control that is indicative of the risk of degenerative complications.
HbA1c reflects average blood-glucose concentrations over the previous three- to
four-month period and is a primary endpoint in the Company's Phase III studies.
Although medical studies show a correlation between reductions in 24-hour
average glucose concentrations, reductions in fructosamine, and lowering HbA1c
there can be no assurance that Phase II clinical results with pramlintide
showing reductions in 24-hour average glucose and fructosamine concentrations
will translate into sustainable improvements in HbA1c levels in the Phase III
efficacy studies. Further testing of pramlintide and the Company's other product
candidates in research or development may reveal undesirable and unintended side
effects or other characteristics that may prevent or limit their commercial use.
The Company or applicable regulatory authorities may suspend clinical trials at
any time if the subjects or patients participating in such trials are being
exposed to unacceptable health risks. There can be no assurance that the Company
will not encounter problems in clinical trials which will cause the Company or
such regulatory authorities to delay or suspend clinical trials. In addition,
there can be no assurance that any of the Company's products will obtain
regulatory approval for any indication. In August 1996, AMYLIN and Johnson &
Johnson conducted an administrative interim review of three-month data from
AMYLIN'S first two, one-year Phase III clinical trials. Based on the
administrative interim review, Johnson & Johnson decided to continue its
collaboration with the Company. In compliance with FDA guidelines, the data that
was the subject of the administrative interim review may not be disclosed. There
can be no assurance that such data will ultimately support the marketing
approval of pramlintide as a drug for the treatment of diabetes. Products, if
any, resulting from AMYLIN's research and development programs are not expected
to be commercially available for a number of years.
The time required for completing such clinical testing and obtaining such
regulatory approvals is uncertain and approval itself may not be obtained. In
addition, delays or rejections may be encountered based upon FDA regulatory
review of each submitted New Drug Application ("NDA") and changes in FDA
policies during the period of product development. Similar delays may also be
encountered in other countries. There can be no assurance that, even after such
time and expenditures, regulatory approval will be obtained for any products
developed by the Company. Moreover, prior to receiving regulatory approval to
market its products, the Company may have to demonstrate that its products
represent improved forms of treatment over existing therapies. If regulatory
approval of a product is granted, such approval may be subject to limitations on
the indicated uses for which the product may be marketed. Further, even if such
regulatory approval is obtained, a marketed product, its manufacturers and its
manufacturing facilities are subject to continual review and periodic
inspections and later discovery of previously unknown problems with a product,
manufacturer or facility may result in restrictions on such product or
manufacturer, including withdrawal of the product from the market. See
"Business -- Pramlintide: The Drug Candidate" and "-- Government Regulation."
History of Operating Losses. The Company has experienced significant
operating losses since its inception in 1987. As of June 30, 1996, the Company
had an accumulated deficit of approximately $135.7 million. The Company expects
to incur significant additional operating losses over the next several years.
Substantially all of the Company's revenues to date have been derived from
development funding, license fees and milestone payments under collaborative
agreements and from interest income. To date, the Company has not received any
revenues from product sales. To achieve profitable operations, the Company,
alone or with others such as Johnson & Johnson, must successfully develop,
manufacture, obtain required regulatory approvals and market its products.
Future Capital Needs; Uncertainty of Additional Funding. The Company's
future capital requirements will depend on many factors, including continuation
of the collaboration with Johnson & Johnson, scientific progress in its research
and development programs, the magnitude of these programs, progress with
preclinical and clinical
7
<PAGE> 9
trials, the time and costs involved in obtaining regulatory approvals, the costs
involved in preparing, filing, prosecuting, maintaining and enforcing patents,
competing technological and market developments, changes in collaborative
relationships, the ability of the Company to establish research, development and
commercialization arrangements pertaining to its non-pramlintide related
programs, and the costs of manufacturing scale-up. AMYLIN anticipates that its
existing available cash, interest income from cash investments, future payments
by and loan facilities from Johnson & Johnson, and the proceeds from this
Offering and the sale of the Johnson & Johnson Shares will be adequate to
satisfy the Company's capital requirements through 1998. Although Johnson &
Johnson's various payments to AMYLIN should be sufficient to fund the
substantial portion of the Company's 50% share of pramlintide development, the
Company may elect to raise additional funds to pay for its share of such
development and for other corporate purposes. There can be no assurance that
additional financing will be available on acceptable terms or at all.
Patents and Proprietary Rights. The Company's success will depend in part
on its ability to obtain patent protection for its products and technologies
both in the United States and other countries. The patent positions of
biotechnology and pharmaceutical companies can be highly uncertain and involve
complex legal and factual questions. As of September 30, 1996, the Company held
rights to 22 issued U.S. patents. Of these issued patents, 17 are owned by
AMYLIN and five are licensed exclusively to AMYLIN. In addition, AMYLIN owns or
has exclusive rights to 28 patent applications pending with the U.S. Patent and
Trademark Office (the "U.S. PTO"). The Company intends to file additional
applications as appropriate for patents covering both its products and
processes. Generally, it is the Company's policy to file foreign counterparts in
countries with significant pharmaceutical markets. The Company has filed foreign
counterparts of certain of its issued and pending applications in many
countries. There can be no assurance that patents will issue from any of these
applications or, if patents do issue, that claims allowed on issued patents will
be sufficient to protect the Company's technology. In addition, there can be no
assurance that patents issued to the Company will not be challenged, invalidated
or circumvented or that the rights granted thereunder will provide proprietary
protection or commercial advantage to the Company.
Since patent applications in the United States are maintained in secrecy
until patents issue and since publication of discoveries in the scientific or
patent literature often lag behind actual discoveries, the Company cannot be
certain that it was the first to make the inventions covered by each of its
pending patent applications or that it was the first to file patent applications
for such inventions. In the event that a third party has also filed a patent for
any of its inventions, the Company may have to participate in interference
proceedings declared by the U.S. PTO to determine priority of invention, which
could result in substantial cost to the Company, even if the eventual outcome is
favorable to the Company. There can be no assurance that the Company's patents,
if issued, would be held valid by a court of competent jurisdiction. There can
be no assurance that the Company will not be obliged to defend itself in court
against allegations of infringement of third-party patents. An adverse outcome
in such a suit could subject the Company to significant liabilities to third
parties, require disputed rights to be licensed from third parties or require
the Company to cease using such technology.
The Company has received letters from a third party asserting that
pramlintide is covered by a patent which the Company has licensed from such
third party. The third party claims to be entitled to 50% of any sublicensing
fees received from Johnson & Johnson pursuant to the Collaboration Agreement
(defined elsewhere herein), as well as a future running royalty as specified in
the license agreement. The Company believes that these assertions are without
merit and will vigorously defend against any claims related to the foregoing,
should any such claims be brought. The third party has been informed that the
Company does not agree with its assertions and that no such sublicensing moneys
have been received from Johnson & Johnson, which is not a sublicensee under the
third party's patent.
If patents are issued to other companies that contain competitive or
conflicting claims and such claims are ultimately determined to be valid, there
can be no assurance that the Company would be able to obtain licenses to these
patents at a reasonable cost or be able to develop or obtain alternative
technology.
In order to protect its proprietary technology and processes, AMYLIN also
relies in part on confidentiality agreements with its corporate partners,
employees, consultants, outside scientific collaborators and sponsored
researchers and other advisors. There can be no assurance that these agreements
will not be breached, that the Company will have adequate remedies for any
breach or that the Company's trade secrets will not otherwise
8
<PAGE> 10
become known or be independently discovered by competitors. See
"Business -- Johnson & Johnson Collaboration" and "-- Patents, Proprietary
Rights, and Licenses."
Competition; Technological Change. Other products are currently in
development or exist in the market that may compete directly with the products
that the Company is seeking to develop and market. Various products are
available to treat Type II diabetes, including sulfonylureas, metformin,
acarbose and other compounds. In addition, several companies are researching
various approaches to improve treatments for Type I and Type II diabetes. There
can be no assurance that the Company's products, even if successfully tested and
developed, will have sufficient advantages over existing products to cause
health care professionals to adopt them over such other
products or that the Company's products will offer an economically feasible
alternative to such existing products.
The Company is engaged in a rapidly developing field. A number of companies
are pursuing the development of novel pharmaceuticals which target the same
diseases that AMYLIN is targeting. These companies include biotechnology and
pharmaceutical companies. It is expected that the number of companies seeking to
develop products and therapies for the treatment of diabetes and other metabolic
disorders will increase. There can be no assurance that other products and
therapies will not be developed that will either render the Company's proposed
products obsolete or that will have advantages that will significantly outweigh
the advantages of the products and therapies that the Company is seeking to
develop.
Many of the Company's competitors have substantially greater financial,
technical and human resources than the Company. In addition, many of these
competitors have significantly greater experience than the Company in
undertaking preclinical testing and human clinical trials of new pharmaceutical
products and in obtaining regulatory approvals of human therapeutic products.
Accordingly, the Company's competitors may succeed in obtaining FDA approval for
products more rapidly than the Company. Furthermore, if the Company is permitted
to commence commercial sales of products, it may also be competing with respect
to manufacturing efficiency and marketing capabilities, areas in which it has
limited or no experience. See "Business -- Competition."
Reliance on Third-Party Manufacturers; Manufacture of Pramlintide in
Commercial Quantities. The manufacturing of sufficient quantities of new drugs
is a time consuming and complex process. The Company currently has no facilities
for the manufacture of clinical trial or commercial supplies of pramlintide. The
Company currently relies on third parties to manufacture pramlintide for
preclinical testing and clinical trials. Pramlintide has not yet been
manufactured on a commercial scale. Under the terms of the collaboration
agreement with Johnson & Johnson, the Company is responsible for arranging for
the manufacture of pramlintide during the development phase, while Johnson &
Johnson is responsible for manufacturing during the commercialization phase. All
manufacturing facilities must comply with applicable regulations of the FDA. No
assurance can be given that the Company, together with Johnson & Johnson, will
be able to make the transition to commercial production. The Company has
established a quality control and quality assurance program, including a set of
standard operating procedures and specifications, designed to ensure that the
Company's products are manufactured in accordance with current good
manufacturing practices ("GMP") and other applicable domestic and foreign
regulations. However, the Company is dependent upon contract manufacturers and
Johnson & Johnson to comply reliably with such procedures and regulations. There
can be no assurance that these manufacturers will meet the Company's
requirements for quality, quantity or timeliness. See "Business --
Manufacturing."
Attraction and Retention of Key Employees and Consultants. The Company is
highly dependent on the principal members of its scientific and management
staff, the loss of whose services might impede the achievement of research and
development objectives. Recruiting and retaining qualified scientific personnel
to perform research and development work in the future will also be critical to
the Company's success. Although the Company believes it will be successful in
attracting and retaining skilled and experienced scientific personnel, there can
be no assurance that the Company will be able to attract and retain such
personnel on acceptable terms given the competition between numerous
pharmaceutical and biotechnology companies, universities and other research
institutions for experienced scientists and management personnel. In California,
an initiative referred to as Proposition 211 has been placed on the state ballot
for the November 5, 1996 election. Approval of Proposition 211 would result in
certain changes in California law that would, among other things, restrict a
company's ability to indemnify its directors and executive officers and would
effect other changes in the standard of liability,
9
<PAGE> 11
procedure and remedies in securities litigation. If Proposition 211 is approved,
the Company may not be able to indemnify its directors and executive officers in
all circumstances in which it currently provides indemnification and, as a
result, the ability of the Company to attract and retain directors and executive
officers may be materially adversely affected.
The Company does not maintain "key person" insurance on any of its
employees. In addition, the Company relies on consultants and advisors,
including its scientific and clinical advisors, to assist the Company in
formulating its research and development strategy. All of the Company's
consultants and advisors are employed by employers other than the Company and
have commitments to or consulting or advisory contracts with other entities that
may limit their availability to the Company.
Absence of Sales and Marketing Organization. The Company has limited
experience in market development and no experience in sales, marketing or
distribution. To market any of its products directly, the Company must obtain
access to marketing and sales forces with technical expertise and with
supporting distribution capability. To this end, the Company has entered into a
collaboration agreement with Johnson & Johnson which provides that Johnson &
Johnson will have primary responsibility for commercialization of pramlintide.
There can be no assurance that Johnson & Johnson or the Company will establish
adequate sales and distribution capabilities or be successful in gaining market
acceptance for products.
Uncertainty of Pharmaceutical Pricing and Reimbursement; Health Care
Reform. AMYLIN's ability to commercialize its products successfully will depend
in part on the extent to which reimbursement for the cost of such products and
related treatments will be available from government health administration
authorities, private health insurers and other organizations. The levels of
revenues and profitability of pharmaceutical companies may be affected by the
continuing efforts of governmental and third-party payors to contain or reduce
the costs of health care through various means. For example, in certain foreign
markets pricing or profitability of prescription pharmaceuticals is subject to
government control. In the United States, there have been, and the Company
expects that there will continue to be, a number of federal and state proposals
to implement similar government control. In addition, both in the United States
and elsewhere, sales of prescription pharmaceuticals are dependent in part on
the availability of reimbursement from third-party payors, such as government
and private insurance plans. Third-party payors are increasingly challenging the
prices charged for medical products and services. If the Company and Johnson &
Johnson succeed in bringing pramlintide to the market, there can be no assurance
that it will be considered cost effective and that reimbursement will be
available or will be sufficient to allow the Company and Johnson & Johnson to
sell pramlintide on a competitive basis. This could have a material adverse
effect on the Company's business.
Product Liability and Insurance. The Company's business exposes it to
potential product liability risks which are inherent in the testing,
manufacturing and marketing of human therapeutic products. Although the Company
currently has product liability insurance, there can be no assurance that it
will be able to maintain such insurance on acceptable terms or that insurance
will provide adequate coverage against potential liabilities.
Hazardous Materials. The Company's research and development involves the
controlled use of hazardous materials, chemicals and various radioactive
compounds. Although the Company believes that its safety procedures for handling
and disposing of such materials comply with the standards prescribed by state
and federal regulations, the risk of accidental contamination or injury from
these materials cannot be eliminated. In the event of such an accident, others
may seek to hold the Company liable for any damages that result and any such
liability could exceed the resources of the Company.
Volatility of Stock Price. The market prices for securities of
biopharmaceutical and biotechnology companies, including AMYLIN, have
historically been highly volatile, and the market from time to time has
experienced significant price and volume fluctuations that are unrelated to the
operating performance of such companies. Factors such as fluctuation in the
Company's operating results, announcements of technological innovations or new
commercial therapeutic products by the Company or its competitors, clinical
trial results, governmental policy or regulation, developments in patent or
other proprietary rights, developments in the Company's relationships with
Johnson & Johnson or future collaborative partners, public concern as to the
safety of drugs developed by the Company and general market conditions may have
a significant effect on the market price of the Common Stock.
10
<PAGE> 12
USE OF PROCEEDS
The net proceeds to the Company from the sale of the 1,500,000 shares of
Common Stock offered by the Company hereby (the "Offering") are estimated to be
approximately $18.2 million ($20.9 million if the Underwriters' over-allotment
option is exercised in full), assuming a public offering price of $13.00 per
share and after deduction of underwriting discounts and commissions and
estimated expenses payable by the Company in connection with the Offering. In
addition, the net proceeds to the Company from the sale of the Johnson & Johnson
Shares will be $15.0 million. The combined net proceeds to the Company from this
Offering and the sale of the Johnson & Johnson Shares are estimated to be $33.2
million ($35.9 million if the Underwriters' over-allotment option is exercised
in full), assuming a public offering price of $13.00 per share and after
deduction of underwriting discounts and commissions and estimated expenses
payable by the Company.
The Company intends to use the combined net proceeds of this Offering and
the sale of the Johnson & Johnson Shares for expanded development of
pramlintide, including the Phase III efficacy studies, and for the expansion of
its other research and development programs and other general corporate
purposes. To the extent that clinical trials progress as planned, the Company's
research and development expenses will include costs of supplying materials for
and conducting pramlintide clinical trials, expanding the potential use and
indications for pramlintide, further exploring amylin biology and continuing to
broaden its research base to investigate new drug targets for the treatment of
metabolic disorders, including diabetes (such as exendin and GLP-1), obesity and
dyslipidemia. The amounts actually expended for each purpose may vary
significantly depending on numerous factors, including the progress of the
Company's research and development programs, the results of preclinical and
clinical studies, the timing of regulatory submissions and approvals, if any,
technological advances, determinations as to commercial potential of the
Company's compounds and the status of competitive products. Expenditures will
also depend upon the continued participation of Johnson & Johnson in the
collaboration agreement, the availability of additional sources of funds, the
establishment of collaborative arrangements with other companies, and other
factors. The Company anticipates that its existing available cash, interest
income from cash investments, financial payments by and loan facilities from
Johnson & Johnson, and the proceeds of this Offering and the sale of the Johnson
& Johnson Shares will be adequate to satisfy the Company's activities through
1998.
In addition, the Company may also use a portion of such proceeds to acquire
or invest in businesses, products and/or technologies that it considers
complementary to those of the Company. No portion of such proceeds has been
allocated for any specific acquisition.
Pending such uses, the Company will invest the net proceeds in
investment-grade, interest-bearing marketable securities.
11
<PAGE> 13
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the Nasdaq National Market under
the symbol "AMLN." The following table sets forth, for the periods indicated,
the intra-day high and low sales prices per share of Common Stock on the Nasdaq
National Market:
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
1996
Fourth Quarter (through October 11, 1996)............................. $$13.75 $11.13
Third Quarter......................................................... 14.50 7.00
Second Quarter........................................................ 13.00 9.00
First Quarter......................................................... 14.38 8.88
1995
Fourth Quarter........................................................ $ 9.63 $ 6.00
Third Quarter......................................................... 9.50 6.25
Second Quarter........................................................ 9.00 3.50
First Quarter......................................................... 6.50 4.25
1994
Fourth Quarter........................................................ $ 8.50 $ 4.75
Third Quarter......................................................... 8.75 5.75
Second Quarter........................................................ 12.50 5.75
First Quarter......................................................... 15.25 10.00
</TABLE>
The last reported sale price of the Common Stock on the Nasdaq National
Market on October 11, 1996 was $13.00. As of September 30, 1996, there were
approximately 904 stockholders of record of the Company's Common Stock.
DIVIDEND POLICY
The Company has never declared or paid any cash dividends on its capital
stock. The Company currently intends to retain any future earnings for funding
growth and, therefore, does not anticipate paying any cash dividends in the
foreseeable future.
12
<PAGE> 14
CAPITALIZATION
The following table sets forth at June 30, 1996 the actual capitalization
of the Company and the capitalization as adjusted to reflect (i) the receipt of
the estimated net proceeds from the sale of the 1,500,000 shares of Common Stock
being offered by the Company hereby (at an assumed public offering price of
$13.00 per share and after deduction of estimated underwriting discounts and
commissions and estimated expenses payable by the Company in connection with the
Offering), (ii) the concurrent sale of the Johnson & Johnson Shares (at an
assumed price of $13.00 per share) and (iii) the receipt of a $7.0 million
milestone-related payment from Johnson & Johnson in August 1996.
<TABLE>
<CAPTION>
JUNE 30, 1996
-------------------------
ACTUAL AS ADJUSTED
--------- -----------
(IN THOUSANDS)
<S> <C> <C>
Note payable, less current portion................................... $ 3,168 $ 3,168
Obligation under capital lease, less current portion................. 534 534
Stockholders' equity:
Preferred stock, $.001 par value; 7,500,000 shares authorized; no
shares issued or outstanding.................................... -- --
Common stock, $.001 par value; 50,000,000 shares authorized;
28,197,352 shares issued and outstanding; and 30,851,198 shares
to be outstanding as adjusted (1)............................... 28 31
Additional paid-in capital......................................... 167,575 200,730
Accumulated deficit................................................ (135,655) (128,655)
Unrealized (gains) losses on short-term investments................ (6) (6)
------- ---------
Total stockholders' equity...................................... 31,942 72,100
------- ---------
Total capitalization.......................................... $ 35,644 $ 75,802
======= =========
</TABLE>
- ---------------
(1) Excludes 6,991,951 shares reserved for issuance under the Company's stock
option plans, of which 4,658,636 shares were subject to outstanding options
as of June 30, 1996 at a weighted average exercise price of $6.44 per share.
13
<PAGE> 15
DILUTION
The pro forma net tangible book value of the Company's Common Stock at June
30, 1996, after giving effect to the sale of the Johnson & Johnson Shares, was
$45.6 million or $1.55 per share of Common Stock. Pro forma net tangible book
value per share represents the amount of the Company's total tangible assets
after giving effect to the sale of the Johnson & Johnson Shares less total
liabilities divided by the number of shares of Common Stock outstanding plus the
Johnson & Johnson Shares. After giving effect to the sale by the Company of the
1,500,000 shares of Common Stock offered hereby (based upon an assumed offering
price of $13.00 per share and after deducting estimated underwriting discounts
and commissions and estimated offering expenses), the adjusted pro forma net
tangible book value of the Company at June 30, 1996 would have been $63.7
million or $2.06 per share, representing an immediate increase of $.51 per share
to existing stockholders and an immediate dilution of $10.94 per share to new
investors.
The following table illustrates this dilution to new investors:
<TABLE>
<S> <C> <C>
Assumed public offering price per share(1)............................. $13.00
Pro forma net tangible book value per share as of June 30, 1996... $1.55
Increase in pro forma net tangible book value per share
attributable to new investors.................................... .51
-----
Adjusted pro forma net tangible book value per share after this
Offering.............................................................. 2.06
------
Dilution per share to new investors.................................... $10.94
======
</TABLE>
- ---------------
(1) Before deduction of underwriting discounts and commissions and estimated
expenses payable by the Company in connection with the Offering.
The preceding table assumes no exercise of any outstanding options to
purchase Common Stock. At June 30, 1996, there were 4,658,636 shares of Common
Stock issuable upon exercise of outstanding options with a weighted average
exercise price of $6.44 per share. To the extent outstanding options are
exercised, there will be further dilution in net tangible book value per share
of Common Stock to new investors.
14
<PAGE> 16
SELECTED CONSOLIDATED FINANCIAL DATA
The selected consolidated financial data set forth below with respect to
the Company's consolidated statements of operations for each of the years in the
three-year period ended December 31, 1995 and with respect to the consolidated
balance sheets at December 31, 1994 and 1995, are derived from the consolidated
financial statements that have been audited by Ernst & Young LLP, independent
auditors, which are incorporated by reference in this Prospectus and are
qualified by reference to such financial statements and the notes related
thereto. The consolidated balance sheet data at December 31, 1991, 1992 and
1993, and the consolidated statement of operations data for the years ended
December 31, 1991 and 1992 are derived from audited financial statements not
incorporated by reference in this Prospectus. The consolidated statement of
operations for the six months ended June 30, 1995 and 1996 and the consolidated
balance sheet data at June 30, 1996 are derived from unaudited consolidated
financial statements incorporated by reference in this Prospectus. The unaudited
financial statements include all adjustments, consisting only of normal
recurring adjustments, which the Company considers necessary for a fair
presentation of the financial position and the results of operations for these
periods. Operating results for the six months ended June 30, 1996 are not
necessarily indicative of the results that may be expected for the entire year
ending December 31, 1996. The data should be read in conjunction with the
consolidated financial statements, related notes and other financial information
incorporated by reference herein.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30,
------------------------------------------------------------ ---------------------
1991 1992 1993 1994 1995 1995 1996
-------- -------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF
OPERATIONS DATA:
Revenues under
collaborative
agreements............... $ 167 $ 667 $ 667 $ 500 $ 17,045 $ 9,066 $ 10,730
Expenses:
Research and
development............ 7,532 15,368 18,988 30,255 39,337 20,023 25,791
General and
administrative......... 2,013 2,834 4,387 6,383 8,318 4,133 4,275
--------- --------- --------- --------- --------- --------- ---------
9,545 18,202 23,375 36,638 47,655 24,156 30,066
Net interest income........ 261 2,612 2,195 1,637 1,341 313 999
--------- --------- --------- --------- --------- --------- ---------
Net loss................... $ (9,117) $(14,923) $(20,513) $(34,501) $(29,269) $(14,777) $(18,337)
========= ========= ========= ========= ========= ========= =========
Net loss per share......... $ (0.76) $ (0.87) $ (1.15) $ (1.71) $ (1.23) $ (0.69) $ (0.65)
========= ========= ========= ========= ========= ========= =========
Shares used in computing
net loss per share....... 12,029 17,111 17,867 20,185 23,854 21,490 28,084
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------------------- JUNE 30,
1991 1992 1993 1994 1995 1996
-------- -------- -------- -------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA:
Cash, cash equivalents and short-term
investments............................ $ 9,142 $ 54,331 $ 56,250 $ 29,149 $ 53,521 $ 39,552
Working capital.......................... 8,325 52,773 54,435 26,209 45,268 27,896
Total assets............................. 13,028 57,823 62,029 37,306 61,949 48,501
Note payable, less current portion....... -- -- -- 964 1,671 3,168
Obligation under capital leases, less
current portion........................ 1,115 720 819 1,213 759 534
Accumulated deficit...................... (18,113) (33,035) (53,548) (88,049) (117,318) (135,655)
Total stockholders' equity............... 8,530 53,866 58,162 30,869 49,755 31,942
</TABLE>
15
<PAGE> 17
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion of the financial condition and results of
operations of the Company should be read in conjunction with the consolidated
financial statements and the related notes thereto incorporated by reference
herein. The discussion in this Prospectus contains forward-looking statements
that involve risks and uncertainties. The Company's actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, without limitation, those
discussed in the sections entitled "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," as
well as those discussed elsewhere in this Prospectus or incorporated herein by
reference.
OVERVIEW
Since its inception in September 1987, AMYLIN has devoted substantially all
of its resources to its research and development programs and has expended
almost $200 million to this end through September 30, 1996. Substantially all of
the Company's revenues to date have been derived from fees and expense
reimbursements under collaborative agreements and from interest income. AMYLIN
has not received any revenues from the sale of products. The Company has been
unprofitable since its inception and expects to incur additional operating
losses for the next several years. As of June 30, 1996, the Company's
accumulated deficit was approximately $135.7 million.
In June 1995, AMYLIN and Johnson & Johnson entered into a worldwide
collaboration to develop and commercialize pramlintide. By the closing of this
Offering, Johnson & Johnson will have made payments to AMYLIN totaling $80.0
million. These payments primarily included the payment of one-half of the
pramlintide development costs through the date of this Offering, the purchase of
$15.0 million of Common Stock in 1995 and $15.0 million of Common Stock in
conjunction with this Offering, a license fee and certain milestone and option
fee payments.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1996
Revenue
The Company had $10.7 million of revenue for the six month periods ended
June 30, 1996 as compared to $9.1 million for the same period in 1995. The
revenues recognized in 1996 and 1995 were related to the Company's collaboration
with Johnson & Johnson. 1996 revenues were comprised of Johnson & Johnson's one-
half share of collaboration development expenses incurred by AMYLIN in the first
half of the year. 1995 revenues were comprised of Johnson & Johnson's one-half
share of collaboration development expenses incurred by AMYLIN in the second
quarter of 1995 along with a license fee which was paid at the signing of the
agreements.
Operating Expenses
For the six months ended June 30, 1996, operating expenses increased to
$30.1 million from $24.2 million for the same period in 1995.
Research and development expenses for the six months ended June 30, 1996
increased to $25.8 million from $20.0 million for the same period in 1995. The
increase in these expenditures was primarily due to the costs of expanding
pramlintide clinical development efforts. Several other factors also contributed
to this increase, including increased staffing, expanded product development
efforts and increased facilities expenditures.
General and administrative expenses for the six months ended June 30, 1996
increased to $4.3 million from $4.1 million for the same period in 1995. The
increase for the six month period was primarily related to expanded pramlintide
market development efforts in conjunction with the Company's collaboration with
Johnson & Johnson.
16
<PAGE> 18
Other Income and Expense
Interest and other income is principally comprised of interest income from
investment of the Company's cash reserves. Interest and other income increased
to $1.2 million for the six months ended June 30, 1996 from $0.5 million for the
same period in 1995. The increase in interest and other income was primarily due
to higher average cash reserves available for investment for the six months
ended June 30, 1996 as compared to the same period in 1995.
Interest and other expense is principally comprised of interest expense
resulting from long-term debt obligations. Debt financing has been utilized by
the Company to acquire laboratory and other equipment and to fund tenant
improvements to the Company's facilities. In addition, in accordance with the
terms of the Company's collaborative agreement with Johnson & Johnson, Johnson &
Johnson has advanced AMYLIN's share of pramlintide pre-launch marketing expenses
incurred since the date of the collaboration, to be repaid with interest over
time out of AMYLIN's share of future pramlintide profits, if any. Interest and
other expense increased to approximately $171,000 for the six months ended June
30, 1996 from approximately $161,000 for the same period in 1995. The increase
in interest and other expense is reflective of an overall higher long-term debt
balance during the first half of 1996 as compared to 1995.
Net Loss
The Company incurred a net loss of $18.3 million for the six months ended
June 30, 1996 as compared to $14.8 million for the six months ended June 30,
1995. The 1996 increase in the net loss was primarily related to increased
pramlintide clinical development efforts.
AMYLIN expects to incur substantial operating losses over the next several
years due to continuing and increasing expenses associated with its research and
development programs, including preclinical and clinical testing of multiple
product candidates, and related general and administrative support. Operating
losses may fluctuate from quarter to quarter as a result of differences in the
timing of expenses incurred and revenues recognized.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, AMYLIN has financed its operations primarily through
private placements of preferred stock, sales of Common Stock, its collaboration
with Johnson & Johnson, and operating and capital lease obligations.
In June 1995, the Company and Johnson & Johnson entered into a worldwide
collaboration agreement for the development and commercialization of
pramlintide, a diabetes drug candidate currently in Phase III clinical trials.
In conjunction with the collaboration agreement, the Company also entered into a
Stock Purchase Agreement and a Loan Agreement with Johnson & Johnson.
As of June 30, 1996, Johnson & Johnson has made various financial payments
to the Company totaling $50.5 million. These payments primarily include a
license fee, the purchase of $15.0 million of the Company's Common Stock in
1995, and payment of one-half of the pramlintide development costs.
In August 1996, the Company achieved the first milestone in the
collaboration when, based upon an administrative interim review of three-month
data from the first two, one-year Phase III clinical trials, Johnson & Johnson
decided to continue the collaboration. As a result, Johnson & Johnson is making
additional payments associated with the milestone to AMYLIN totaling $22.0
million, in addition to providing significant ongoing development support. The
additional payments associated with the milestone include $7.0 million in
milestone and option fee payments paid by Johnson & Johnson in the third quarter
of 1996 and a commitment to purchase $15.0 million of AMYLIN Common Stock
concurrently with this Offering. In compliance with FDA guidelines, the data
that was the subject of the administrative interim review may not be disclosed.
There can be no assurance that such data will ultimately support the marketing
approval of pramlintide as a drug for the treatment of diabetes.
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<PAGE> 19
In addition to the above mentioned milestone-related payments and
investment, Johnson & Johnson's ongoing financial commitment to AMYLIN now
includes the funding of 50% of development costs and 100% of pre-launch
marketing costs (AMYLIN's one-half share to be repaid over time from future
profits), as well as milestone payments, license fees, equity investments, and a
loan facility for use in certain circumstances. The Company will apply all of
the license fees, cash milestone payments and 50% of the proceeds from Johnson &
Johnson's equity investments towards its share of pramlintide development
expenses. In this regard, Johnson & Johnson paid AMYLIN $7.4 million in
September 1996 as an advance of quarterly development expenses. As a result, by
the closing of this Offering, Johnson & Johnson will have made payments to
AMYLIN totaling $80.0 million.
In addition, AMYLIN and Johnson & Johnson entered into a Loan Agreement
under which Johnson & Johnson agreed to provide to AMYLIN a $27.8 million credit
facility (as of June 30, 1996) for use in certain circumstances to cover the
Company's share of development expenses relating to the collaboration agreement.
This facility will be adjusted in certain circumstances. For example, the
facility will be increased by 50% of any increases in the pramlintide
development budget from the existing pre-approved budget and decreased by 50% of
the Company's net proceeds received from equity and debt offerings after
December 31, 1995 (including the proceeds from this Offering) to investors other
than Johnson & Johnson or other corporate partners.
The Company is dependent on future payments from Johnson & Johnson to
continue the development and commercialization of pramlintide. Johnson & Johnson
may terminate the collaboration agreement with the Company subject to a notice
period of six months. Johnson & Johnson's financial and other obligations under
the collaboration agreement would continue during any such termination notice
period. In addition, Johnson & Johnson has the right to terminate the
collaboration agreement at any time based on material safety or tolerability
issues. Without Johnson & Johnson's continued collaborative support, the Company
might not be able to continue the pramlintide development program, and the
Company's financial condition would be materially adversely affected.
At June 30, 1996, the Company had $39.6 million in cash, cash equivalents
and short-term investments as compared to $53.5 million at December 31, 1995.
The Company invests its cash in U.S. government and other highly rated liquid
debt instruments.
The Company intends to use its financial resources for the ongoing
development of pramlintide, including the Phase III efficacy studies, and for
the expansion of its other research and development programs and other general
corporate purposes. To the extent that clinical trials of the Company's
compounds progress as planned, research and development expenses will include
costs of supplying materials for and conducting pramlintide clinical trials,
expanding the potential use and indications for pramlintide, further exploring
amylin biology and continuing to broaden its research base to investigate new
drug targets for the treatment of metabolic disorders, including diabetes (such
as exendin and GLP-1), obesity and dyslipidemia. The amounts actually expended
for each purpose may vary significantly depending upon numerous factors,
including the progress of the Company's research and development programs, the
results of preclinical and clinical studies, the timing of regulatory
submissions and approvals, if any, technological advances, determinations as to
commercial potential of the Company's compounds, and the status of competitive
products. Expenditures will also depend upon the continued participation of
Johnson & Johnson in the collaboration, the availability of additional sources
of funds, the establishment of collaborative arrangements with other companies,
and other factors.
The Company currently leases or sub-leases approximately 72,000 square feet
of space. The Company is presently considering options to sub-lease an
additional 12,500 square feet of space for its product development efforts. In
addition, the Company is evaluating leasing additional laboratory and office
space in 1997. Should the Company lease this additional space, the terms of the
leases will be at competitive market rates. At this time, the Company expects to
incur approximately $2.0 million of capital expenditures in the second half of
1996. These expenditures will primarily be directed toward the purchase of new
equipment to support research and development efforts. In addition, some capital
expenditures will be directed toward the purchase of equipment coming off of
lease lines which will expire during the year and to complete tenant
improvements to the Company's product development facility. The Company has
entered into a $3.0 million loan agreement for the financing of the majority of
its equipment needs and intends to use this financing source during 1996. As of
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<PAGE> 20
June 30, 1996 approximately $1.0 million of this loan facility had been
utilized. The terms of the loan agreement call for amounts drawn down under the
loan to be repaid monthly over a four year period.
The Company does not expect to generate a positive internal cash flow for
several years due to substantial additional research and development costs,
including costs related to drug discovery, preclinical testing, clinical trials,
manufacturing costs, and general and administrative expenses necessary to
support such activities. AMYLIN anticipates that its existing cash, interest
income from cash investments, financial payments and loan facilities from
Johnson & Johnson and the proceeds of this Offering and the sale of the Johnson
& Johnson Shares will be adequate to satisfy the Company's capital requirements
through 1998. Although Johnson & Johnson's various payments to AMYLIN should be
sufficient to fund the substantial portion of the Company's 50% share of
pramlintide development, the Company may elect to raise additional funds to pay
for its share of such development and for other corporate purposes. However,
there can be no assurance that additional financial resources will be raised in
the necessary time frame or on terms favorable to the Company.
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<PAGE> 21
BUSINESS
The discussion in this Prospectus contains forward-looking statements which
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed in the forward-looking statements. Factors that
could cause or contribute to such differences include, without limitation, those
discussed in the sections entitled "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Business," as
well as those discussed elsewhere in this Prospectus or incorporated herein by
reference.
GENERAL
AMYLIN is focused on developing novel therapeutics for treating people with
diabetes and other metabolic disorders. The Company is conducting a series of
Phase III clinical trials of its lead drug candidate, pramlintide, which is
being developed to improve glucose control in people with Type I
(juvenile-onset) and Type II (maturity-onset) diabetes who use insulin, a
patient population estimated by the Company to comprise 7 million people in
major pharmaceutical markets. In June 1995, AMYLIN entered into a worldwide
collaboration with Johnson & Johnson to develop and commercialize pramlintide.
In August 1996, the Company achieved the first milestone in the collaboration
when, based upon an administrative interim review of three-month glycated
hemoglobin (HbA1c) data from the first two, one-year Phase III clinical trials,
Johnson & Johnson decided to continue the collaboration. By the closing of this
Offering, Johnson & Johnson will have made payments to AMYLIN totaling $80.0
million. In addition, Johnson & Johnson has committed to provide significant,
additional financial support for the development and commercialization of
pramlintide, subject to the terms of its agreement with the Company. Assuming
successful Phase III clinical trials, the Company plans to apply for marketing
approval of pramlintide in North America and Europe by the end of 1998. Any
profits or losses from the collaboration will be shared equally between AMYLIN
and Johnson & Johnson. Since its inception, the Company has spent almost $200
million building its integrated drug discovery and development expertise, and,
with its lead drug candidate now well advanced in clinical development, AMYLIN
wishes to broaden its research to develop new drug targets for treating
metabolic disorders, including diabetes, obesity and dyslipidemia.
BACKGROUND
Diabetes is a major global health problem which is inadequately treated by
available drugs. The International Diabetes Federation estimates that over 100
million people worldwide are afflicted with this disease. Diabetes costs the
American economy over $100 billion annually, according to a study reported in
the Journal of Clinical Endocrinology and Metabolism, which went on to say that
". . . health care expenditures for people with diabetes constituted about one
in seven health care dollars spent in 1992." Moreover, the American Medical
Association reports that the incidence of diagnosed diabetes as a percentage of
the American population has tripled since 1958, and that the total number of
diagnosed and undiagnosed cases has grown to about 16 million.
Diabetes occurs when the pancreas no longer produces enough insulin, a
hormone that regulates the metabolism of blood glucose. In Type I
(juvenile-onset) diabetes, which afflicts about 10% of all people with diagnosed
diabetes in developed countries, the pancreatic beta cells that make insulin
have been destroyed. In the more prevalent form of diabetes, Type II
(maturity-onset), the insulin-producing cells are unable to produce enough
insulin to compensate for the patient's poor sensitivity to the hormone in
glucose-using tissues such as skeletal muscle (a condition called insulin
resistance). In both Type I and Type II diabetes, the insulin deficiency results
in an abnormally high blood-glucose concentration (a condition called
hyperglycemia) which is an important cause of the degenerative complications
associated with diabetes, including blindness, kidney failure and nerve damage.
In addition, many authorities believe hyperglycemia plays a role in the
development of heart disease.
Since its discovery in 1921, insulin replacement therapy has played a
central role in treating diabetes. For people with Type I diabetes, insulin
injections are essential, since these patients would otherwise die. For people
with Type II diabetes, oral medications that either stimulate greater insulin
production or enhance insulin sensitivity may improve metabolic control.
However, as many as 20% of people with newly diagnosed Type II diabetes do not
respond to oral therapy. Moreover, patients who do respond to oral therapy
become progressively
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<PAGE> 22
resistant over time, with as many as 10% each year ceasing to derive a
therapeutic benefit. Thus, an estimated 40% of people diagnosed with Type II
diabetes are using insulin injections to manage their disease. The Company
estimates that in the major pharmaceutical markets as many as two million people
with Type I diabetes and five million people with Type II diabetes use insulin
to help control their blood-glucose concentrations.
Despite 75 years of efforts to improve insulin therapy, most people with
diabetes have great difficulty achieving optimal glucose control with insulin
alone. For superior glucose control, each insulin injection must be adjusted to
reflect the person's pre-meal blood-glucose concentration and the carbohydrate
content of the meal. These adjustments require multiple finger-pricks each day
for glucose monitoring. Aggressive efforts to bring blood-glucose concentration
down into the normal range using intensive insulin therapy increase the risk of
blood-glucose concentration falling too low (a condition called hypoglycemia),
which can cause unpleasant and dangerous effects including sweating,
disorientation, personality changes, coma, convulsions and even death. To avoid
hypoglycemia, many people with diabetes maintain high blood-glucose
concentrations but thereby increase their risk of degenerative complications
from the disease.
In June 1993, the National Institutes of Health announced the results of
the Diabetes Control and Complications Trial ("DCCT"). This decade-long,
prospective study of over 1,400 people with Type I diabetes established the
importance of glucose control as a determinant of long-term risk of degenerative
complications. The quality of glucose control for each DCCT participant was
determined by measuring the proportion of blood-hemoglobin which had chemically
combined with blood-glucose to form glycated hemoglobin (HbA1c). This
measurement is a recognized indicator of average blood-glucose concentration
over the three- to four-month period prior to testing, and lower glycated
hemoglobin values are indicative of better glucose control. In this regard, the
data from the DCCT showed definitively that the risk of degenerative
complications is greatly reduced if blood-glucose concentrations in people with
Type I diabetes can be brought closer to the concentrations measured in
non-diabetic individuals. However, the intensive insulin therapy used to achieve
this benefit had several side effects and disadvantages, including (1) a
three-fold increase in severe hypoglycemia compared with the control group, (2)
an average weight gain of 10 to 15 pounds per patient, (3) a highly burdensome
treatment regimen requiring strict patient compliance, and (4) intensive and
costly support from diabetes care-givers. As a result of these side effects and
disadvantages, most people using insulin currently are unable to achieve normal
blood-glucose concentrations. In view of the health problems and economic costs
associated with this failure to achieve optimal glucose control, the Company
believes that significant value would result from a new medicine that could
safely improve glucose control without imposing unacceptable treatment and cost
burdens.
Although the DCCT study involved people with Type I diabetes only, the
Company believes that the conclusions of that study concerning the benefits of
glucose control are also applicable to people with Type II diabetes. Additional
clinical studies addressing the issue in people with Type II diabetes are
underway in the United Kingdom under the sponsorship of various nationally
funded academic research institutes and pharmaceutical companies and are
expected to be concluded in 1997.
Amylin: The Partner Hormone in Glucose Control
In 1987, researchers at the University of Oxford discovered that the
pancreatic beta-cells which make insulin also produce a second peptide, amylin.
In the nine years since amylin's discovery, extensive research in animals and
humans has generated data consistent with the idea that amylin is a partner
hormone to insulin:
- Rises in blood-glucose concentrations after eating stimulate increases in
blood concentrations of amylin, so that both amylin and insulin
concentrations normally increase after meals.
- Amylin exerts biological effects on various tissues relevant to glucose
metabolism, including the gastrointestinal tract, pancreas and skeletal
muscle.
- In people with diabetes who need insulin therapy, both the endogenous
insulin and amylin responses are deficient.
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<PAGE> 23
Amylin has been shown to have at least two effects believed to be important
for normal glucose metabolism: it slows glucose inflow into the bloodstream from
the gastrointestinal tract, and it suppresses glucagon secretion and thereby
lowers glucose production by the liver.
Effect on Glucose Inflow. After a typical meal, over 75 grams of glucose
pass from the stomach and gastrointestinal tract, through the bloodstream, and
into muscle and liver tissue for storage as glycogen. This amount of glucose is
large relative to the five to six grams of glucose typically present at normal
concentrations in the blood pool of an average adult. In healthy people, the
rate of glucose inflow from the gastrointestinal tract is closely matched with
the rate of outflow into the storage tissues, allowing the body to maintain
normal blood glucose concentrations. The endocrine regulator of glucose outflow
rate is insulin, which is secreted by pancreatic beta-cells in response to
rising blood glucose concentrations. The endocrine regulator of glucose inflow
rate has, until recently, been unknown.
Now, preclinical and clinical data support the idea that amylin is a key
regulator of glucose inflow rate. In animals and humans, rising amylin blood
concentrations slow down the transfer of nutrients from the stomach to the
intestines. This transfer is the rate-limiting step in the appearance of
nutrient-derived glucose in the bloodstream. Thus, the simultaneous secretion of
both insulin and amylin by the pancreatic beta-cells acts to regulate both
inflow and outflow, thereby keeping post-meal blood glucose concentrations
within a narrow and healthy range.
Effect on Glucagon Secretion. Between meals, the liver produces glucose
which is carried by the bloodstream to the brain and other tissues that do not
store glucose. The endocrine regulator of liver glucose production is glucagon,
a peptide hormone secreted by pancreatic alpha-cells in response to falling
blood glucose concentrations. At mealtime, glucagon secretion must be suppressed
to avoid hyperglycemia induced by excess liver glucose production, and a known
regulator of glucagon suppression is insulin.
Now, preclinical and clinical data support the idea that amylin is also an
endocrine regulator of glucagon secretion. In animals and humans, increasing
amylin blood concentrations slows pancreatic alpha-cell secretion of glucagon,
an effect which amplifies the same regulatory effect of insulin. Thus, the
simultaneous secretion of both insulin and amylin by the pancreatic beta-cells
acts to suppress glucagon and curtail liver glucose production, thereby helping
to keep post-meal blood glucose concentrations within a narrow and healthy
range.
The following diagram illustrates what the Company believes are important
roles of amylin as a partner hormone to insulin in glucose control:
LOGO
Studies have shown that people with Type I diabetes have difficulty
avoiding hyperglycemia at mealtime with insulin alone, in part because they have
abnormally rapid glucose inflow from the gastrointestinal tract into the
bloodstream and abnormally high blood concentrations of glucagon associated with
excessive liver glucose production. These findings are consistent with the
predicted effects of their amylin deficiency, and they support the clinical
hypothesis that amylin replacement therapy could aid in achieving better glucose
control.
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<PAGE> 24
PRAMLINTIDE: THE DRUG CANDIDATE
The following table summarizes the completed, ongoing and planned clinical
trials for pramlintide:
PRAMLINTIDE CLINICAL DEVELOPMENT PROGRAM
<TABLE>
<CAPTION>
DISEASE PLACE PATIENTS DURATION ENDPOINT STATUS++
--------- ------- -------- ----------- ----------------------------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Phase I
Type I US 20 1 dose Safety Completed
Normal Europe 37 1 dose Safety (dose limiting) Completed
Type I Europe 17 1 dose Safety Completed
-----
74
Phase II
Type I US 25 2 doses Post-meal glucose profile Completed
Type I US 32 5 days Hypoglycemia challenge Completed
Type I US 48 5 days Hypoglycemia challenge Completed
Type I Europe 10* 1 day Glucose clamp Completed
Type I US 84* 2 weeks Post-meal glucose profile Completed
Type I US 13 24 hrs. Dose ranging Completed
Type I US 27* 5 hrs. Post-meal glucose profile Completed
Type I US 86* 2 weeks Clinical pharmacology Completed
Type I Europe 9* 5 hrs. Mechanism of action (gastric emptying) Completed
Type I US 168* 2 weeks 24-hr glucose profile Completed
Type I US 215* 1 month Fructosamine Completed
Type II US 24* 5 hrs. Post-meal glucose profile Completed
Type I Europe 14* 1 month Mechanism of action (glucagon) Completed
Type II US 203* 1 month Fructosamine Completed
Type I US 27* 1 dose Insulin mixing Completed
Type I Europe 18* 3 doses Mechanism of action (gastric emptying) Completed
Type I US 24* 1 month Mechanism of action (liver glycogen) Ongoing
Type I US 24* 1 month Insulin sparing Ongoing
Type I US 30* 5 doses Insulin mixing Ongoing
Type I US 30* 5 doses Insulin mixing Ongoing
Type I tbd+ 24 tbd Safety (gastroparesis) Planned
Type II tbd 24* tbd Mechanism of action (gastric emptying) Planned
Type I tbd 24* tbd Mechanism of action (gastric emptying) Planned
Type I&II tbd 36* tbd Mechanism of action (glucagon) Planned
Type I tbd 30 tbd Nocturnal hypoglycemia Planned
Type I&II tbd (a) tbd Insulin mixing Planned
Type I&II tbd 272* tbd Pharmacokinetics (3 to 6 studies) Planned
-----
1,521
Phase III
Type II US 440* 12 mos. HbA1c (pivotal) Ongoing
Type I US 400* 12 mos. HbA1c (pivotal) Ongoing
Type I Europe 100 12 mos. Long-term safety & HbA1c (open label) Ongoing
Type I US 350 12 mos. Long-term safety & HbA1c (open label) Ongoing
Type I Europe 400* 6 mos. HbA1c (pivotal) Planned
Type I US 400* 6 mos. HbA1c (pivotal) Planned
Type II US 600* 6 mos. HbA1c (pivotal) Planned
Type II Europe 400* 6 mos. HbA1c (pivotal) Planned
Type I&II Europe (a) 12 mos. Safety (pen injectors) Planned
Type I tbd 100 12 mos. Safety (pediatric) Planned
-----
3,190
-----
Total Patients 4,785
=====
</TABLE>
- ---------------
* Double blind, placebo controlled studies.
+ "tbd" means "to be decided."
++ "Planned" refers to the period from the fourth quarter 1996 through the end
of 1998.
(a) Patients already counted in other studies.
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<PAGE> 25
A chemical analog of human amylin, pramlintide (previously referred to as
AC137), combines the desired biologic actions of the native hormone with
superior pharmaceutical characteristics which greatly facilitate the
manufacture, formulation, and stability of the finished drug product. In
preclinical testing, pramlintide has elicited similar biological responses in
vitro and in vivo to those observed with the natural hormone. Also, pramlintide
has shown no toxicology issues to date with doses that are many multiples
greater than the highest expected human dose. In Phase II clinical trials,
pramlintide has been well tolerated at the anticipated therapeutic doses, and
the patient drop-out rate because of adverse drug effects (nausea) at these
doses has been less than 5%. Based on these results, the Company is encouraged
about the prospects for a good clinical safety profile of a long-term
pramlintide dosing regimen.
The Company's pramlintide development program includes 18 completed Phase I
and Phase II clinical trials involving more than 1,000 insulin-using people with
diabetes. Over 750 people with diabetes have completed two- or four-week dosing
periods in double-blind, placebo-controlled Phase II studies. In addition, the
Phase II program included several mechanism-of-action studies. Important
findings from these clinical investigations include the following:
- Pramlintide produced statistically significant and clinically relevant
reductions in blood-glucose concentrations in seven-out-of-seven Phase II
clinical trials assessing glucose control as measured:
-- After meals in people with Type I and Type II diabetes who use
insulin;
-- Over a 24-hour period in people with Type I diabetes; and
-- By fructosamine, a surrogate marker which reflects average glucose
concentrations over the two-to-three weeks prior to testing, in
people with Type I and Type II diabetes who use insulin.
- Glucose lowering was achieved in people with Type I and Type II diabetes
who use insulin without an increase in the incidence of hypoglycemia
compared with the placebo group.
- Pramlintide was well tolerated at the anticipated therapeutic doses.
- No clinically important safety concerns have arisen to date in Phase II
and Phase III trials involving over 1,800 people.
- At least two important physiologic mechanisms of pramlintide.
Key clinical results supporting these findings and the Company's
development plans for Phase III trials are discussed below.
Key Clinical Results
In a 14-day, double-blind, placebo-controlled Phase II clinical study
completed in 1994, subjects with Type I diabetes had a statistically significant
reduction in blood-glucose concentrations after a test meal compared to placebo
when they self injected pramlintide three times per day in addition to their
usual insulin therapy. Results from this study were presented at the June 1994
annual meeting of the American Diabetes Association and were published in April
1996 in Diabetologia.
In January 1995, AMYLIN disclosed the results of a placebo-controlled,
double-blind, clinical pharmacology study in which an intravenous infusion of
pramlintide significantly reduced post-meal blood-glucose concentrations in
subjects with Type II diabetes who use insulin. This finding was similar to
previous observations in comparable studies in people with Type I diabetes.
Results from this study were presented at the June 1995 annual meeting of the
American Diabetes Association and the September 1995 annual meeting of the
European Association for the Study of Diabetes.
In February 1995, the Company reported the results of another 14-day,
double-blind, placebo-controlled Phase II study in subjects with Type I
diabetes, which showed that 30-microgram doses of pramlintide self-administered
four times per day resulted in a statistically significant reduction in
blood-glucose concentrations following a test meal and also significantly
reduced the average blood-glucose concentrations over a 24-hour observation
period (35 mg/dl, p = 0.003) during which patients ingested their usual meals,
compared to placebo.
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<PAGE> 26
Results from this study were presented at the September 1995 annual meeting of
the European Association for the Study of Diabetes.
In August 1995, the Company reported the results of a 28-day, double-blind,
placebo-controlled Phase II trial in subjects with Type I diabetes. This study
showed that self-administered, 30-microgram doses of pramlintide four times per
day (one before each main meal and a late-night snack) significantly lowered the
excessive rise in post-meal blood-glucose concentration, compared to the placebo
control group. Using this dosing regimen, the study also confirmed that
pramlintide significantly lowered 24-hour average blood-glucose concentrations
(31 mg/dl, p = 0.009) and fructosamine (33 micromoles/liter, p = 0.003),
compared to placebo. As in previous studies, the 30-microgram dose of
pramlintide was well tolerated. The only adverse effects significantly different
from those reported by the placebo group were mild gastrointestinal symptoms in
a small number of patients, and those were substantially reduced after the first
two weeks of treatment. Results from this study were presented at the June 1996
annual meeting of the American Diabetes Association.
At the same meeting, the Company presented results which suggest that it is
feasible to mix pramlintide with insulin in the same syringe just prior to
administration. In this study involving people with Type I diabetes, plasma
glucose profiles were similar when identical doses of Humulin(R) 70/30 insulin
and pramlintide were administered, either as separate injections or mixed in the
same syringe immediately prior to injection. The Company is investigating
interactions with additional insulin preparations in studies which are presently
underway.
In August 1996, the Company reported the results of a 28-day, double-blind,
placebo-controlled Phase II trial in subjects with Type II diabetes who use
insulin. In all dose groups, self-administered pramlintide significantly lowered
fructosamine as follows: 30 micrograms four times a day (17.5 micromoles/liter,
p = 0.029), 60 micrograms four times a day (22.6 micromoles/liter, p = 0.001),
and 60 micrograms three times a day (24.1 micromoles/liter, p = 0.003). These
results are similar to the positive findings previously reported in patients
with Type I diabetes. The reduction in fructosamine in the 60 microgram dose
groups represents a 50 - 60% reduction in the excess of fructosamine above the
upper limits of the normal range. Therefore, this study demonstrated that
three-times-a-day dosing of pramlintide can achieve similar clinical benefits as
four-times-a-day dosing in people with Type II diabetes who use insulin. The
study also corroborated the excellent short-term safety profile that has been
observed to date in other clinical trials of pramlintide. The gastrointestinal
symptoms that occurred in a small percentage of people with the initiation of
therapy were generally mild in nature and decreased during the first two weeks
of therapy.
The Company has reviewed its clinical data and planned clinical trial
protocols with its collaborators at Johnson & Johnson, outside clinical
consultants, various regulatory authorities, and European regulatory
consultants. As a result of these reviews, the Company initiated a series of
Phase III trials as described below.
Phase III Clinical Trials
In June 1995, AMYLIN began its PARADIGM (Pramlintide for Amylin
Replacement: Adjunct for Diabetes in Glycemic Management) trials, a Phase III
program involving a series of six pivotal studies designed to assess the
long-term safety and efficacy of pramlintide. The PARADIGM studies will involve
approximately 2,600 people at multiple centers in North America and Europe and
are planned to be completed in 1998.
The primary endpoint of the Phase III studies is a reduction in HbA1c, a
measurement that is well accepted by regulatory authorities and the medical
community as the key indicator of long-term average blood-glucose concentrations
and a predictor of long-term degenerative complications. HbA1c is also the
primary endpoint for marketing approval of other diabetes drugs which are
designed to lower blood-glucose. Also, changes in fructosamine have been shown
to mirror subsequent changes in HbA1c when the improvement in glucose control is
maintained over time. Consequently, if the ability of pramlintide to lower
24-hour of average blood-glucose and fructosamine seen during Phase II studies
translates to long-term efficacy as evidenced by a safe, clinically relevant,
and statistically significant reduction in HbA1c in Phase III trials, the
Company believes pramlintide should be approvable as a drug to improve glucose
control in people with diabetes who use insulin therapy.
25
<PAGE> 27
In June 1995, the Company initiated a Phase III efficacy study in people
with Type II diabetes who use insulin, involving one-year dosing, to test
whether 30-, 75- and 150-microgram doses of pramlintide self-administered three
times daily can safely improve glucose control.
In September 1995, the Company initiated a separate Phase III study in
people with Type I diabetes involving one-year dosing. Dosing initially employed
a 30-microgram, four-times-per-day dosing regimen. After three months of dosing,
subjects receiving pramlintide who did not achieve a reduction in HbA1c of 1% or
more were re-randomized into one of two treatment arms receiving either
30-microgram or 60-microgram doses four times per day.
Enrollment in both Phase III studies was completed in June 1996. The
different dose-frequency regimens in studies of Type I and Type II diabetes were
designed to facilitate integration with different insulin regimens.
In August 1996, AMYLIN and Johnson & Johnson completed an administrative
interim review of data from these two, one-year Phase III trials. The review
included an analysis of HbA1c reductions after three months of dosing in
patients receiving pramlintide or placebo in the various arms and the safety
data set which had accrued to date. The administrative interim review, which was
planned and discussed with the FDA in advance of the initiation of the studies,
did not allow any protocol changes and will not result in any statistical
penalties at the end of the studies. Based on the administrative interim review,
Johnson & Johnson decided to continue its collaboration with the Company. In
compliance with FDA guidelines, the data that was the subject of the
administrative interim review may not be disclosed. There can be no assurance
that such data will ultimately support the marketing approval of pramlintide as
a drug for the treatment of diabetes.
In addition to the ongoing one-year Phase III studies, AMYLIN also plans to
initiate four additional Phase III studies during the fourth quarter of 1996,
two each in people with Type I and Type II diabetes who use insulin. The studies
in people with Type I diabetes will employ dosing regimens involving two-,
three-, and four-times-a-day administration, while the studies in people with
Type II diabetes will employ dosing regimens involving two-and three-times-a-day
administration. The Company is also conducting open label safety studies, label
claims studies, mechanism-of-action studies and drug interaction studies.
The design, planning and execution of clinical trials for drug candidates
aimed at chronic therapy of important diseases require expertise in many areas.
Consequently, the Company has recruited management and technical personnel
experienced in the fields of medical affairs, product development, clinical
development, marketing, quality assurance and regulatory affairs. The Company
also relies upon additional guidance from its Clinical Advisory Board, which is
comprised of leading American and European experts in the treatment of diabetes,
and its collaborators at Johnson & Johnson. An outside Data Monitoring Board is
reviewing safety data in ongoing double-blind Phase III trials.
OTHER RESEARCH AND DEVELOPMENT ACTIVITIES
Additional Pramlintide Development Activities
A continuing priority of the Company is to expand the potential use of
pramlintide by improving the convenience of drug administration. AMYLIN plans to
launch pramlintide in pre-filled cartridges for use in specially designed pen
injectors. As part of its Phase III trials, AMYLIN is conducting studies to
confirm that the most popular formulations of insulin can be mixed with
pramlintide in the same syringe just prior to injection. The Company is also
researching the possibility of dual cartridge injector pens (for injecting
insulin and pramlintide simultaneously) and non-needle routes of administration,
including buccal (in lozenge form), pulmonary (for inhalation), transdermal (by
patch), nasal and jet injector.
Company scientists and physicians will also be researching additional
clinical indications for pramlintide. For instance, preliminary Phase II results
suggest that some people with Type II diabetes, who are unresponsive to oral
hypoglycemic agents but who are not yet using insulin, might benefit from
pramlintide's actions. The Company plans to conduct further Phase II studies in
this patient population in 1997. Also, amylin's reported actions on bone
metabolism and on inducing satiety could have therapeutic benefit for patients
with diabetes and/or other metabolic diseases. In addition, the Company is
conducting research to identify orally-active chemical analogs of amylin.
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<PAGE> 28
Non-Amylin Metabolic Targets
In order to develop and commercialize pramlintide, AMYLIN has created an
integrated research and development team for discovering and developing
medicines focused on the control of glucose and lipid metabolism. AMYLIN is
leveraging these capabilities and is broadening its research base beyond the
study of amylin to include research of new drug targets for treating metabolic
disorders, including diabetes, obesity, and dyslipidemia (a condition
characterized by unhealthy levels of cholesterol and triglycerides). The
Company's experience and expertise gained in exploring the biology and chemistry
of amylin and several amylin-related compounds in clinical testing is directly
applicable in these efforts.
In addition to its internal discovery efforts, the Company is also in
discussions with other third parties to collaborate on new technologies and/or
in-license other metabolic compounds. To this end, in October 1996, the Company
acquired exclusive rights to certain patents and patent applications relating to
exendin, a newly discovered compound derived from the venom of the Gila monster
lizard, and glucagon-related peptide (GLP-1). The Company plans to evaluate both
of these compounds as potential drugs for treating diabetes. In particular,
these compounds have been shown in preclinical studies to have effects known to
be important for improving glucose control, including stimulation of secretion
of insulin and modulation of gastric emptying to slow the entry into the
bloodstream of glucose from ingested carbohydrates. Presumably as a result of
these actions, exendin and GLP-1 have exhibited glucose-lowering effects in an
animal model of diabetes. In addition, GLP-1 has been shown to suppress glucagon
secretion in animal studies. Because increases in blood glucose following meals
are a major cause of excessive blood glucose concentrations in people with
diabetes, the actions of exendin and GLP-1 observed in animals to suppress
meal-induced increases of blood glucose, coupled with their effects on insulin,
strengthen the rationale for their potential use as a medicine for treating
certain people with either Type I or II diabetes. AMYLIN's research team will
assess exendin, GLP-1 and their analogs in the treatment of diabetes, and
appropriately qualified product candidates will be evaluated further in clinical
trials. Assuming satisfactory progress in preclinical studies, the Company is
aiming to file an Investigational New Drug application ("IND") for exendin,
GLP-1 or an analog during 1998.
JOHNSON & JOHNSON COLLABORATION
In June 1995, AMYLIN and Johnson & Johnson entered into a worldwide
collaboration to develop and commercialize pramlintide. By the closing of this
Offering, Johnson & Johnson will have made payments to AMYLIN totaling $80.0
million. These payments primarily included payment of one half of the
pramlintide development costs through the date of this Offering, the purchase of
$15.0 million of Common Stock in 1995 and $15.0 million of Common Stock in
conjunction with this Offering, a license fee and certain milestone and option
fee payments.
Under the collaboration agreement with Johnson & Johnson (the
"Collaboration Agreement"), AMYLIN is the lead party in developing and
registering pramlintide and Johnson & Johnson is the lead party in
commercializing and marketing pramlintide. Both parties share equally in the
development and commercialization costs incurred for pramlintide as well as
sharing equally in any profits or losses recognized after commercial launch. In
addition, Johnson & Johnson has committed to provide AMYLIN with significant,
additional financial support in the form of funding for certain development and
commercialization costs, milestone payments and equity investments, subject to
the terms of its agreement with the Company. The Collaboration Agreement is part
of an overall strategy of Johnson & Johnson to establish a comprehensive disease
management approach to diabetes. In conjunction with the Collaboration
Agreement, the Company also entered into a Stock Purchase Agreement (the "Stock
Purchase Agreement") and a Loan and Security Agreement (the "Loan Agreement")
with Johnson & Johnson.
In August 1996, AMYLIN achieved the first milestone in the collaboration
when, following an administrative interim review of data from the first two,
one-year Phase III clinical trials, Johnson & Johnson decided to continue the
collaboration. The review included an analysis of HbA1c reductions after three
months of dosing in patients receiving pramlintide or placebo in the various
arms of these two trials, and the safety data set which had accrued from these
two studies. As a result, Johnson & Johnson made $7.0 million in milestone and
option fee payments in the third quarter of 1996 and committed to purchase $15.0
million of Common Stock concurrent
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<PAGE> 29
with this Offering and to provide significant ongoing development support. In
compliance with FDA guidelines, the data that was the subject of the
administrative interim review may not be disclosed. There can be no assurance
that such data will ultimately support the marketing approval of pramlintide as
a drug for the treatment of diabetes.
In addition to the above mentioned milestone-related payments and
investments, Johnson & Johnson's financial commitment now includes the funding
of 50% of development costs and 100% of pre-launch marketing costs (AMYLIN's
one-half share to be repaid over time from future profits), as well as future
milestone payments, license fees, equity investments, and a loan facility for
use in certain circumstances. The Company will apply all of the license fees,
cash milestone payments and 50% of the proceeds from Johnson & Johnson's equity
investments towards its share of pramlintide development expenses. If the
development of pramlintide is terminated or if a sufficient level of operating
profits of pramlintide has not been achieved within three years after commercial
launch, the Company will be required to repay loans provided by Johnson &
Johnson out of a percentage of the Company's net income.
In accordance with the terms of the Stock Purchase Agreement, Johnson &
Johnson purchased 1,955,407 shares of Common Stock in 1995 providing the Company
with net proceeds of approximately $15.0 million. Pursuant to the Stock Purchase
Agreement, AMYLIN is entitled to require Johnson & Johnson to purchase
additional shares of Common Stock upon the achievement of certain milestones.
With the achievement of the first milestone, AMYLIN earned and is now exercising
its right to sell additional shares of its Common Stock to Johnson & Johnson
resulting in net proceeds of $15.0 million concurrent with this Offering. After
completion of the Phase III clinical program, the Company also has the right to
sell additional shares of its Common Stock to Johnson & Johnson resulting in net
proceeds of up to $15.0 million. As part of the Stock Purchase Agreement, the
Company agreed to use at least 50% of the proceeds from the sale of Common Stock
to Johnson & Johnson to fund AMYLIN's share of pramlintide development expenses
under the Collaboration Agreement.
In addition, the parties have entered into a Loan Agreement under which
Johnson & Johnson has agreed to provide to AMYLIN a $27.8 million credit
facility (as of June 30, 1996) for use in certain circumstances to cover the
Company's share of development expenses related to the Collaboration Agreement.
This facility will be adjusted in certain circumstances. For example, the
facility will be increased by 50% of any increases in the pramlintide
development budget from the existing pre-approved budget and decreased by 50% of
the Company's net proceeds received from equity and debt offerings after
December 31, 1995 (including the proceeds from this Offering) to investors other
than Johnson & Johnson or other corporate partners.
The Company is dependent on the future payments from Johnson & Johnson to
continue the development and commercialization of pramlintide. Johnson & Johnson
may terminate the Collaboration Agreement with the Company subject to a notice
period of six months. Johnson & Johnson's financial and other obligations under
the Collaboration Agreement would continue during any such termination notice
period. In addition, Johnson & Johnson has the right to terminate the
Collaboration Agreement at any time based on material safety or tolerability
issues. Without Johnson & Johnson's continued collaborative support, the Company
might not be able to continue the pramlintide development program, and the
Company's financial condition would be materially adversely affected.
COMMERCIALIZATION STRATEGY
The development of pramlintide is aimed at satisfying the medical needs of
approximately seven million people with diabetes who use insulin in the major
pharmaceutical markets. To address a market of this potential breadth and
magnitude in a timely and effective fashion, AMYLIN sought to leverage its
technology platform by entering into a collaboration with Johnson & Johnson.
AMYLIN selected Johnson & Johnson as a partner to commercialize pramlintide
based on its status as one of the world's largest pharmaceutical companies with
expertise in global manufacturing, marketing and selling peptide medicines and
hormone-replacement therapies. Pramlintide could represent an important
strategic opportunity for Johnson & Johnson to expand its leadership position in
the field of diabetes medicines.
AMYLIN believes that Johnson & Johnson brings unique characteristics to the
partnership, given its established relationship with people who use insulin and
its reputation for consumer marketing. Johnson &
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<PAGE> 30
Johnson's LifeScan subsidiary, a global leader in the sale of blood glucose
monitors and test strips, has a strong franchise in the diabetes market that
provides Johnson & Johnson with broad access to diabetes specialists and
millions of people with diabetes who use insulin. In addition, Johnson &
Johnson's established consumer relationships and pharmaceutical market access
will provide the necessary platform for the future commercialization of
pramlintide.
AMYLIN and Johnson & Johnson have invested approximately $1.2 million to
date in market research studies with physicians and consumers in North America
and Europe. These studies have allowed AMYLIN and Johnson & Johnson to develop a
commercialization plan designed to accelerate the adoption of pramlintide upon
commercial launch. This plan, developed jointly by AMYLIN and Johnson & Johnson,
is focused on building a solid foundation of opinion leader advocacy and
clinical support for the fundamental role of pramlintide in the regulation of
blood glucose levels. The plan also identifies key education initiatives and
communication strategies for maximizing the breadth and depth of physician
knowledge.
Johnson & Johnson will be the lead party in the commercialization and
marketing of pramlintide. To assist in executing the commercialization plan
referred to above, AMYLIN will employ medical affairs and strategic marketing
personnel in each major country. It will be their responsibility to implement
the plans discussed above and to work directly with the Johnson & Johnson
subsidiary in each country to assist in developing the pramlintide launch
marketing plan, to ensure broad sales force deployment, and to provide
appropriate medical/ marketing education on pramlintide. AMYLIN currently has
marketing staff in place in the U.S., United Kingdom and France and plans to add
additional marketing personnel in the U.S., Germany, United Kingdom, France and
Italy in 1997.
PATENTS, PROPRIETARY RIGHTS, AND LICENSES
The Company believes that patents and other proprietary rights are
important to its business. The Company's policy is to file patent applications
to protect technology, inventions and improvements that are important to the
development of its business. AMYLIN also relies upon trade secrets, know-how,
continuing technological innovations and licensing opportunities to develop and
maintain its competitive position. The Company plans to enforce its issued
patents and its rights to proprietary information and technology. The Company
reviews third-party patents and patent applications in its fields of endeavor,
both to shape its own patent strategy and to identify useful licensing
opportunities.
At September 30, 1996, the Company held rights to 22 issued U.S. patents.
Of these issued patents, 17 are owned by AMYLIN and five are licensed
exclusively to AMYLIN. In addition, AMYLIN owns or has exclusive rights to 28
patent applications pending with the U.S. PTO. The Company has 11 pending and
five issued U.S. patents relevant to the development and commercialization of
pramlintide. AMYLIN also has filed foreign counterparts of certain of these
issued patents and applications in many countries. Generally, it is the
Company's policy to file foreign counterparts in countries with significant
pharmaceutical markets. All commercial rights to these patents and patent
applications are held by the Company or, in some cases, jointly with Johnson &
Johnson. There can be no assurance that patents will issue from any of the
still-pending applications.
The patent positions of pharmaceutical and biotechnology firms, including
the Company, can be uncertain and involve complex legal and factual questions.
In addition, the coverage sought in a patent application can be significantly
reduced before the patent is issued. Consequently, the Company does not know
whether any of its pending applications will result in the issuance of patents
or, if any patents are issued, whether they will provide significant proprietary
protection or commercial advantage or will be circumvented by others. Since
patent applications in the United States are maintained in secrecy until patents
issue and since publication of discoveries in the scientific or patent
literature often lag behind actual discoveries, the Company cannot be certain
that it was the first to make the inventions covered by each of its pending
patent applications or that it was the first to file patent applications for
such inventions. In the event a third party has also filed a patent for any of
its inventions, the Company may have to participate in interference proceedings
declared by the U.S. PTO to determine priority of invention, which could result
in substantial cost to the Company, even if the eventual outcome is favorable to
the Company. There can be no assurance that the Company's patents, if issued,
would be held valid by a court of competent jurisdiction. There can be no
assurance that the Company will not be obliged to defend itself in court
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<PAGE> 31
against allegations of infringement of third-party patents. An adverse outcome
in such a suit could subject the Company to significant liabilities to third
parties, require disputed rights to be licensed from third parties or require
the Company to cease using such technology.
The Company has received letters from a third party asserting that
pramlintide is covered by a patent which the Company has licensed from such
third party. The third party claims under its license to be entitled to 50% of
any sublicensing fees received from Johnson & Johnson pursuant to the
Collaboration Agreement, as well as a future running royalty as specified in the
license agreement. The Company believes that these assertions are without merit
and will vigorously defend against any claims related to the foregoing, should
any such claims be brought. The third party has been informed that the Company
does not agree with its assertions and that no such sublicensing moneys have
been received from Johnson & Johnson, which is not a sublicensee under the third
party's patent.
If patents are issued to other companies that contain competitive or
conflicting claims and such claims are ultimately determined to be valid, there
can be no assurance that the Company would be able to obtain licenses to these
patents at a reasonable cost or be able to develop or obtain alternative
technology.
The Company also relies upon trade secret protection for its confidential
and proprietary information. There can be no assurance that others will not
independently develop substantially equivalent proprietary information or
techniques or otherwise gain access to the Company's trade secrets or disclose
such technology or that the Company can meaningfully protect its trade secrets.
It is the Company's policy to require its corporate partners, employees,
consultants, outside scientific collaborators and sponsored researchers and
other advisors to execute confidentiality agreements upon the commencement of
employment or consulting relationships with the Company. There can be no
assurance, however, that these agreements will provide meaningful protection or
adequate remedies for the Company's trade secrets in the event of unauthorized
use or disclosure of such information.
MANUFACTURING
The Company has internally developed and also has contracted for the
development of processes for manufacturing pramlintide bulk drug and dosage
form. Progress has been made in improving the purity of active drug substance,
in scaling up drug synthesis and dosage form manufacturing processes, and in
developing new approaches for drug synthesis. The Company plans to launch
pramlintide based upon solid phase synthesis of the bulk substance.
The Company currently has no facilities to manufacture clinical trial or
commercial supplies of pramlintide and currently relies on third parties to do
so. The Company has selected manufacturers which it believes comply with GMP and
other regulatory standards. Under the terms of the agreement with Johnson &
Johnson, AMYLIN is responsible for arranging for the manufacture of pramlintide
during the development phase, while Johnson & Johnson is responsible for
manufacturing during the commercialization phase. The Company currently uses two
external suppliers for synthetic chemical manufacture of pramlintide bulk drug
and two suppliers and Johnson & Johnson for fill-finish activities. The Company
has established a quality control and quality assurance program, including a set
of standard operating procedures and specifications, designed to ensure that the
Company's products are manufactured in accordance with GMP and other applicable
domestic and foreign regulations. However, the Company is dependent upon third
party manufacturers to comply reliably with such procedures and regulations.
There can be no assurance that these manufacturers will meet the Company's
requirements for quality, quantity or timeliness.
GOVERNMENT REGULATION
Regulation by governmental authorities in the United States and foreign
countries is a significant factor in the manufacture and marketing of
pramlintide and in the Company's ongoing research and development
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<PAGE> 32
activities. All of the Company's therapeutic products, including pramlintide,
will require regulatory approval by governmental agencies prior to
commercialization. In particular, human therapeutic products are subject to
rigorous preclinical testing and clinical trials and other pre-market approval
requirements by the FDA and regulatory authorities in foreign countries. Various
federal, and in some cases state, statutes and regulations also govern or
influence the manufacturing, safety, labeling, storage, record keeping and
marketing of such products. The lengthy process of seeking these approvals and
the subsequent compliance with applicable federal and state statutes and
regulations require the expenditure of substantial resources. Any failure by the
Company or its collaborators or licensees to obtain, or any delay in obtaining,
regulatory approvals could adversely affect the marketing of any products
developed by the Company and its ability to receive product revenue, royalty
revenue or profit sharing payments.
The activities required before a pharmaceutical agent may be marketed in
the United States begin with preclinical testing. Preclinical tests include
laboratory evaluation of product chemistry and animal studies to assess the
potential safety and efficacy of the product and its formulations. The results
of these studies must be submitted to the FDA as part of an IND application,
which must be reviewed by the FDA before proposed clinical trials can begin.
Typically, clinical trials involve a three-phase process. In Phase I, clinical
trials are conducted with a small number of subjects to determine the early
safety and tolerability profile and the pattern of drug distribution and
metabolism. In Phase II, clinical trials are conducted with groups of patients
afflicted with a specified disease in order to determine preliminary efficacy,
dosing regimes and expanded evidence of safety. In Phase III, large-scale,
multicenter, adequate and well-controlled, comparative clinical trials are
conducted with patients afflicted with a target disease in order to provide
enough data for the statistical proof of efficacy and safety required by the FDA
and others. In the case of pramlintide, the results of the preclinical testing
and clinical trials are then submitted to the FDA for a pharmaceutical product
in the form of a New Drug Application ("NDA") for approval to commence
commercial sales. In responding to an NDA, the FDA may grant marketing approval,
request additional information, or deny the application if it determines that
the application does not satisfy its regulatory approval criteria. There can be
no assurance that approvals will be granted on a timely basis, or at all.
Among the conditions for NDA approval is the requirement that the
prospective manufacturer's quality control and manufacturing procedures conform
with GMP guidelines. In complying with GMP, manufacturers must continue to
expend time, money and effort in the area of production and quality control and
quality assurance to ensure full technical compliance. Manufacturing facilities
are subject to periodic inspections by the FDA to ensure compliance. See
"-- Manufacturing."
The Company is also subject to various federal, state and local laws,
regulations and recommendations relating to safe working conditions, laboratory
and manufacturing practices, the experimental use of animals and the use and
disposal of hazardous or potentially hazardous substances, including radioactive
compounds and infectious disease agents, used in connection with the Company's
research. The extent of government regulation which might result from any
legislation or administrative action cannot be accurately predicted.
Clinical testing, manufacture and sale of the Company's products outside of
the United States will be subject to regulatory approval by other jurisdictions
which may be more or less rigorous than in the United States.
COMPETITION
Although competitive activity in the diabetes market is intense, the
Company believes that for many people with diabetes pramlintide, if approved,
will have advantages over alternative approaches to improving glucose control.
Pramlintide is aimed at restoring the actions of a human hormone that is missing
or deficient in people with diabetes who use insulin, and hormone replacement
therapy is a well established treatment concept. Subcutaneous injections of
pramlintide are relatively straightforward for patients who are already
self-injecting insulin. Moreover, assuming clinical utility is established,
alternative delivery routes and mechanisms may be feasible based on the current
dosing requirements and chemical characteristics of pramlintide. Based upon
published reports of alternative approaches to improving glucose control, the
Company believes that pramlintide could provide an attractive combination of
safety and efficacy and could become an important part of the drug armamentarium
directed at diabetes. Since diabetes is a heterogeneous disease with many
degenerative
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complications, it is likely that multiple pharmaceutical strategies will be
useful in arresting its relentless progression.
Nevertheless, pramlintide may compete with several established therapies
for market share. In addition, many companies are pursuing the development of
novel pharmaceuticals which target the same diseases to which pramlintide is
targeted, and several product candidates are in Phase III clinical trials or in
registration. These companies may develop and introduce products competitive
with or superior to pramlintide. Such competitive or potentially competitive
products may include troglitazone, and if indications for pramlintide's use are
expanded to people with diabetes who do not use insulin, may also include
metformin, acarbose, bromocriptine and other oral hypoglycemic agents such as
sulfonylureas.
The Company's competition will be determined in part by the indications for
which the Company's products are developed and ultimately approved by regulatory
authorities. An important factor in competition may be the timing of market
introduction of the Company's or competitors' products. Accordingly, the
relative speed with which AMYLIN and Johnson & Johnson or future corporate
partners can develop products, complete the clinical trials and approval
processes and supply commercial quantities of the products to the market are
expected to be important competitive factors. The Company expects that
competition among products approved for sale will be based, among other things,
on product efficacy, safety, convenience, reliability, availability, price and
patent position.
EMPLOYEES
As of September 30, 1996, AMYLIN had 206 full-time equivalent employees, of
whom 38 hold Ph.D. or Sc.D. degrees and seven hold M.D. degrees (five of whom
also hold Ph.D.s). A significant number of the Company's management and
professional employees have had prior experience with pharmaceutical,
biotechnology or medical product companies. AMYLIN believes that it has been
highly successful in attracting skilled and experienced scientific personnel.
None of the Company's employees is covered by collective bargaining agreements
and management considers relations with its employees to be good.
CLINICAL ADVISORY BOARD
To provide strategic guidance to AMYLIN's pramlintide clinical development
program, as well as to assist in reviewing clinical data, AMYLIN works with a
network of experts who serve as clinical advisors to the Company. Each advisor
has entered into a consulting agreement with the Company. All of the advisors
are employed by employers other than the Company and have commitments to or
consulting or advisory agreements with other entities that may limit their
availability to the Company. The advisors have agreed, however, not to provide
any services to any other entities that might conflict with the services that
they provide the Company. The Company has not issued stock or stock options to
any of its clinical advisors. The clinical advisory board is comprised of the
following individuals from the diabetes medical community in America and Europe:
<TABLE>
<S> <C>
CHARLES M. CLARK, JR., M.D. Professor of Medicine and Pharmacology,
Indiana University School of Medicine;
Co-Director of Regenstrief Institute;
Past President of American Diabetes Association
DANIEL W. FOSTER, M.D. Donald W. Seldin Distinguished Chair in Internal
Medicine,
Professor and Chairman, Department of Internal
Medicine,
University of Texas, Southwestern Medical Center
LEIF GROOP, M.D. Professor of Endocrinology,
Malmo General Hospital,
University of Lund, Sweden
HARRY KEEN, M.D., F.R.C.P. Emeritus Professor of Human Metabolism and Diabetes,
Guys and St. Thomas Hospitals, London;
Honorary President of International Diabetes
Foundation
</TABLE>
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<PAGE> 34
<TABLE>
<S> <C>
PIERRE LEFEBVRE, M.D., PH.D. Head of Diabetes, Nutrition and Metabolic Disorders
Division,
University of Liege Hospital, Belgium;
Past President of European Association for the Study
of Diabetes
GERARD SLAMA Chef de Service, Service de Diabetologie,
Hopital Hotel-Dieu de Paris
FRED W. WHITEHOUSE, M.D. Division Head, Endocrinology and Metabolism,
Henry Ford Hospital;
Past President of American Diabetes Association
</TABLE>
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<PAGE> 35
MANAGEMENT
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
The following table sets forth certain information with respect to the
executive officers, directors and key employees of the Company as of September
30, 1996:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------- --- ---------------------------------------------------------
<S> <C> <C>
Howard E. Greene, Jr.(1) 53 Chairman of the Board
Richard M. Haugen(1) 44 President, Chief Executive Officer and Member, Board of
Directors
Gareth W. Beynon, M.D., Ph.D. 46 Vice President of Amylin Europe Limited
Daniel M. Bradbury 35 Vice President of Marketing
Suzanne S. Burgess 39 Vice President of Administration
Maurizio Denaro, M.D. 45 Senior Vice President of Research
Bradford J. Duft 41 Vice President and General Counsel
Richard A. Kenley, Ph.D. 50 Vice President of Product Development
Orville G. Kolterman, M.D. 49 Vice President of Medical Affairs
Albert A. Lauritano 43 Vice President of Business Development
Marjorie T. Sennett 36 Vice President, Chief Financial Officer and Assistant
Secretary
Robert G. Thompson, M.D. 58 Vice President of Clinical Development
Mary W. Treuhaft, Ph.D. 53 Vice President of Regulatory Affairs and Quality
Assurance
Andrew A. Young, M.D., Ph.D. 44 Vice President of Physiology
James C. Blair, Ph.D.(1)(2) 57 Member, Board of Directors
Joseph C. Cook, Jr.(1)(3) 55 Member, Board of Directors
James C. Gaither 59 Member, Board of Directors
Ginger L. Howard 41 Member, Board of Directors
Vaughn M. Kailian 52 Member, Board of Directors
Timothy J. Wollaeger(2)(3) 53 Member, Board of Directors
</TABLE>
- ---------------
(1) Member of the Executive Committee.
(2) Member of the Compensation Committee.
(3) Member of the Audit Committee.
Mr. Greene has served as Chairman of the Board of Directors since he
co-founded the Company in 1987. He was a full-time employee from September 1989
until September 1996, at which time he became a half-time employee. Mr. Greene
served as Chief Executive Officer of the Company from Company inception until
July 1996, and he has served as Chairman of the Executive Committee since that
time. From October 1986 to September 1993, Mr. Greene was a general partner of
Biovest Partners, a venture capital firm, and in this capacity he was Chairman
of the Board of Pyxis Corporation from 1989 to 1993. He was Chief Executive
Officer of Hybritech Incorporated from 1979 to its acquisition by Eli Lilly &
Company in 1986, and he was co-inventor of Hybritech's monoclonal antibody
diagnostic technology. Prior to joining Hybritech, he was an executive with
Baxter Healthcare Corporation from 1974 to 1979 and a consultant with McKinsey &
Company from 1967 to 1974. He is Chairman of the Board of Cytel Corporation and
a director of Allergan, Inc., Neurex Corporation and The International
Biotechnology Trust Plc. Mr. Greene received an M.B.A. from Harvard University.
Mr. Haugen, an executive officer of the Company, has served as President,
Chief Executive Officer and a director since July 1996. Previously, Mr. Haugen
was Executive Vice President, Chief Operating Officer and a director of
Allergan, Inc., a leading eye care company that develops, manufactures and
markets ethical pharmaceuticals and over-the-counter products. As an employee of
Allergan since 1980, Mr. Haugen served in a variety of sales, manufacturing and
general management positions, including President Worldwide Sales & Marketing,
President Pharmaceuticals Division and President Optical Division. Prior to
joining Allergan, he was employed by American Hospital Supply. He serves on the
Dean's Advisory Board for the University of
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<PAGE> 36
California at Irvine Graduate School of Management. Mr. Haugen received an
M.B.A. from the University of Southern California.
Dr. Beynon, an executive officer of the Company, has served as Vice
President of Amylin Europe Limited, the Company's wholly owned European
subsidiary, since February 1992. Prior to joining the Company, Dr. Beynon had
been employed at G.D. Searle & Co. since 1984, where he held a number of
positions in Europe, including Director of Clinical Research, Director of
Strategic Planning and Regulatory Affairs and Marketing Director for France.
From 1979 to 1984, he practiced internal medicine with a particular interest in
endocrinology and diabetes. He held a number of clinical appointments at London
Teaching Hospitals, including Guys Hospital and the Postgraduate Medical School
at Hammersmith Hospital. Dr. Beynon has a Ph.D. in endocrine physiology from the
University of Cambridge and completed his training for his M.B.B.Chir. (M.D.) at
Guys Hospital, London. Dr. Beynon also earned an M.B.A. at Cranfield Management
Institute.
Mr. Bradbury has served as Vice President of Marketing since June 1995.
From July 1994 to May 1995, Mr. Bradbury held the position of Director,
Marketing -- AMYLIN Europe Limited. Prior to joining the Company, Mr. Bradbury
was employed by SmithKline Beecham Pharmaceuticals, where he held a number of
positions, most recently as Associate Director, Anti-Infectives in the Worldwide
Strategic Product Development Division. Prior to 1986, Mr. Bradbury worked as a
Pre-registration Pharmacist with Glaxo Group Research. Mr. Bradbury holds a
B.Pharm. from Nottingham University and a Diploma in Management Studies from
Harrow and Ealing Colleges of Higher Education.
Ms. Burgess has served as Vice President of Administration since May 1994.
Ms. Burgess joined the Company in March 1992 as Director of Human Resources and
most recently held the position of Senior Director of Human Resources and
Facilities Administration. Prior to joining the Company, Ms. Burgess worked for
seven years with Dole Food Company/Castle & Cooke, Inc. where she held a number
of positions including Director of Human Resources.
Dr. Denaro, an executive officer of the Company, has served as Senior Vice
President of Research since February 1996. Prior to joining the Company, he was
a Vice President of Research at Hoechst Marion Roussel, Inc., and he was Center
Director of the Marion Merrell Dow Research Institute in Cincinnati. From 1985
to 1994, Dr. Denaro held various positions at Marion Merrell Dow Research
Institute's Lepetit Research Center, Gerenzano, Italy, including Vice President
and Director from 1992 to 1994. Prior to 1985, Dr. Denaro held various senior
research and post-doctoral fellowship positions at Centro di Riferimento
Oncologico in Italy, Uppsala University in Sweden and Stanford Medical School.
Dr. Denaro earned an M.D. from Bologna University Medical School.
Mr. Duft, an executive officer of the Company, has served as Vice President
and General Counsel since July 1990. Prior to joining the Company, from 1983 to
July 1990, he was an attorney in private practice with the patent law firm of
Lyon & Lyon, most recently as managing partner of its San Diego office. From
1980 to 1983, he served as law clerk and technical advisor to Judge Giles S.
Rich of the U.S. Court of Appeals for the Federal Circuit and the U.S. Court of
Customs and Patent Appeals. Mr. Duft received a J.D. from California Western
School of Law and an LL.M. in Patent and Trade Regulation from George Washington
University.
Dr. Kenley has served as Vice President of Product Development since
January 1994. Prior to joining the Company, he was Director of Pharmaceutical
Sciences at Genetics Institute, Inc. From 1986 to 1990, Dr. Kenley was Associate
Director of Analytical Chemistry at Baxter Healthcare Corporation. From 1982 to
1986, he was Department Head of Analytical Chemistry Development at Syntex
Corporation. Dr. Kenley earned a Ph.D. in chemistry from the University of
California at San Diego.
Dr. Kolterman, an executive officer of the Company, has served as Vice
President, Medical Affairs since July 1993 and Director, Medical Affairs from
May 1992 to July 1993. From 1983 to May 1992, he was Program Director of the
General Clinical Research Center and Medical Director of the Diabetes Center,
both at the University of California, San Diego Medical Center. Since 1989 he
has been Adjunct Professor of Medicine at U.C.S.D. From 1978 to 1983, he was
Assistant Professor of Medicine in the Endocrinology and Metabolism Division at
the University of Colorado School of Medicine, Denver. He is a member of the
Diabetes Control and
35
<PAGE> 37
Complications Trial Study Group and past-President of the California Affiliate
of the American Diabetes Association. Dr. Kolterman earned an M.D. from Stanford
University School of Medicine.
Mr. Lauritano has served as Vice President of Business Development since
December 1994. From February 1994 to December 1994, Mr. Lauritano held the
position of Vice President of Market Development. From 1982 to February 1994,
Mr. Lauritano was employed by Novo Nordisk Pharmaceuticals, where he held a
number of positions, most recently as Vice President New Product Marketing and
Business Development. In this position, he was responsible for strategic
planning and new product launches in the United States. From 1981 to 1982, he
was Assistant Vice President of the Pharmaceutical Division of Bauers-Krey
Associates, a consulting firm. Prior to 1981, he held various clinical research
positions at Lederle Laboratories and ICI Americas. Mr. Lauritano received an
M.S. in Pharmacology from Rutgers University.
Ms. Sennett, an executive officer of the Company, has served as Vice
President and Chief Financial Officer since January 1989 and has served as
Assistant Secretary since January 1993. From August 1982 to July 1986, Ms.
Sennett held several corporate finance positions at Bankers Trust Company, one
of which involved the structuring of leveraged acquisitions. From August 1986 to
June 1988, she attended the Stanford Graduate School of Business, from which she
received an M.B.A. She is a member of the Nasdaq Regional Advisory Board.
Dr. Thompson has served as Vice President of Clinical Development since May
1994. From 1986 to 1994, Dr. Thompson held a number of positions, including
Global Research Physician, at Eli Lilly and Co. Prior to 1986, he served as
Professor of Pediatrics, Chair of the Pediatric Endocrine Division, and Vice
Chairman of the Department of Pediatrics at the University of Iowa, College of
Medicine. Dr. Thompson received his M.D. from the University of Iowa, College of
Medicine.
Dr. Treuhaft has served as Vice President, Regulatory Affairs and Quality
Assurance since September 1996. From 1994 to September 1996, she was Vice
President, Regulatory Affairs of RGene Therapeutics. From 1993 to 1994, she was
Senior Director, Regulatory Affairs and Quality Assurance of Glycomed
Incorporated and from 1989 to 1993, Associate Director, Regulatory Affairs of
Schering Plough Research. Prior to 1989, Dr. Treuhaft was Senior Clinical
Research Coordinator for Hoffman-LaRoche, Inc. and Associate Director,
Biotechnology Assays for Schering Corporation. Dr. Treuhaft received her Ph.D.
in Microbiology from the University of Chicago.
Dr. Young has served as Vice President of Physiology since January 1994.
From 1989 to 1993 he held a number of positions in the Company's Physiology
department, most recently as Principal Scientist and Senior Director of
Physiology. Prior to joining the Company in 1989, Dr. Young was a lecturer in
the Department of Physiology at the University of Auckland, New Zealand and a
part-time general medical practitioner. From 1984 to 1987, Dr. Young was a
Clinical Research Scientist at the National Institutes of Health in Phoenix,
Arizona, where he studied insulin resistance and diabetes. He received his M.B.,
Ch.B. (M.D.) and his Ph.D. in Physiology from the University of Auckland, New
Zealand.
Dr. Blair has served as a director since December 1988 and serves on the
Compensation and Executive Committees. He has been a general partner of Domain
Associates, a venture capital investment firm, since 1985. Domain Associates
manages Domain Partners, L.P., Domain Partners II, L.P. and Domain Partners III,
L.P. and is the U.S. venture capital advisor to Biotechnology Investments, Ltd.
From 1969 to 1985, Dr. Blair was an officer of three investment banking and
venture capital firms. Dr. Blair is a director of CoCensys, Inc., Dura
Pharmaceuticals, Inc., Gensia, Inc. and Houghten Pharmaceuticals, Inc. Dr. Blair
received a B.S.E. from Princeton University and the M.S.E. and Ph.D degrees from
the University of Pennsylvania in electrical engineering.
Mr. Cook has served as a director since November 1994. Mr. Cook is a
founding partner of Life Science Advisors, Inc. and President of Cambrian
Associates, Inc. Mr. Cook retired as Group Vice-President, Global Manufacturing,
Engineering and Corporate Quality at Eli Lilly and Co. ("Lilly") in 1993. During
his 28 years with Lilly, Mr. Cook was a Vice-President of Sales and Marketing
and Chief Financial Officer for Elanco Products Company and General Manager of a
worldwide business unit of Lilly. He is also a director of Dura Pharmaceuticals,
Inc., NABI, Inc., and Personnel Management, Inc. He is a founder of Mountain
Ventures, Inc., a real estate development firm.
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<PAGE> 38
Mr. Gaither has served as a director since November 1995. He has been a
partner of the law firm Cooley Godward LLP ("Cooley Godward") since 1971 where
he also served as managing partner from 1984 to 1990. Prior to joining Cooley
Godward in 1969, Mr. Gaither served as Staff Assistant to the President of the
United States from July 1966 to January 1969. He is a director of Basic
American, Inc., Levi Strauss & Co., and the Stanford Management Company and
serves on the executive committee of the Board of Visitors at Stanford Law
School. He is a trustee of the Carnegie Endowment for International Peace, The
James Irvine Foundation, The Rand Corporation, The Scripps Research Institute
and The William and Flora Hewlett Foundation. Mr. Gaither received his J.D. from
Stanford University.
Ms. Howard has served as a director since November 1995. Ms. Howard has
served as Vice President of Guidant Corporation, a medical device company, since
July 1994. She also holds the position of president of the Vascular Intervention
Group, which includes Advanced Cardiovascular Systems (ACS) and Devices for
Vascular Intervention. She has served as President and Chief Executive Officer
of ACS since January 1993. Prior to joining ACS, she held various positions with
Eli Lilly and Co. from 1979 to 1992, including sales and strategic planning
positions. She serves on the Board of Directors and the Executive Committee for
the California Healthcare Institute and on the Advisory Board of the California
Institute for Federal Policy Research. Ms. Howard received an M.B.A. from
Harvard University.
Mr. Kailian has served as a director since November 1995. Mr. Kailian has
served as President, Chief Executive Officer and board member of COR
Therapeutics, Inc. since March 1990. From 1967 to 1990, Mr. Kailian was employed
by Marion Merrell Dow, Inc., a pharmaceutical company, and its predecessor
companies, in various general management, marketing and sales positions. Among
the positions held by Mr. Kailian were President and General Manager, Merrell
Dow USA and Corporate Vice President of Global Commercial Development, Marion
Merrell Dow, Inc. He is a director of COR Therapeutics, Inc., Arris
Pharmaceutical Corporation, the Biotechnology Organization and the California
Health Care Institute. Mr. Kailian holds a B.A. from Tufts University.
Mr. Wollaeger has served as a director since the Company's inception. He
has been the general partner of Kingsbury Associates and the general partner of
Kingsbury Capital Partners, L.P. I and II, venture capital investment
partnerships, since December 1993. Mr. Wollaeger was Senior Vice President of
Columbia Hospital Corporation ("CHC"), a hospital management company, and
President of Sutter Corporation, CHC's medical products subsidiary, from May
1990 until December 1993. Mr. Wollaeger was a general partner of Biovest
Associates from February 1987 until September 1993. From 1983 to 1986, Mr.
Wollaeger served as Senior Vice President and Chief Financial Officer of
Hybritech Incorporated. From 1972 to 1980, he was employed by Baxter Healthcare
Corporation. Mr. Wollaeger is a director of Celtrix Pharmaceuticals, Inc.,
Raytel Medical Corporation and Phamis, Inc. He received an M.B.A. from Stanford
University.
37
<PAGE> 39
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of September 30, 1996 by: (i) each director;
(ii) each executive officer employed by the Company in that capacity on
September 30, 1996; (iii) all executive officers and directors of the Company as
a group; and (iv) all those known by the Company to be beneficial owners of more
than five percent of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP
-------------------------------------
BENEFICIAL OWNER(1) NUMBER OF SHARES PERCENT OF TOTAL
- -------------------------------------------------------------- ---------------- ----------------
<S> <C> <C>
Gareth W. Beynon, M.D.(2)..................................... 146,657 *
James C. Blair(2)(3).......................................... 698,424 2.46%
Joseph C. Cook, Jr.(2)........................................ 211,708 *
Maurizio Denaro, M.D.(2)...................................... 0 0
Bradford J. Duft(2)........................................... 313,954 1.11%
James C. Gaither(2)........................................... 13,249 *
Howard E. Greene, Jr.(2)...................................... 1,740,941 6.09%
Richard M. Haugen(2).......................................... 0 0
Ginger L. Howard(2)........................................... 10,725 *
Vaughn M. Kailian(2).......................................... 10,725 *
Orville G. Kolterman, M.D.(2)................................. 114,379 *
Marjorie T. Sennett(2)........................................ 321,892 1.13%
Timothy J. Wollaeger(2)(4).................................... 307,002 1.08%
Johnson & Johnson Development Corporation..................... 1,955,407 6.90%
One Johnson & Johnson Plaza
New Brunswick, NJ 08933
State of Wisconsin Investment Board........................... 2,391,500 8.44%
Lake Terrace
121 E. Wilson Street
P.O. Box 7842
Madison, WI 53707
Wellington Management Company(5).............................. 3,078,300 10.87%
75 State Street
Boston, MA 02109
All executive officers and directors as a group (13
persons)(2)................................................. 3,889,656 13.28%
</TABLE>
- ---------------
* Less than one percent.
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the Securities
and Exchange Commission (the "Commission"). Unless otherwise indicated in
the footnotes to this table and subject to community property laws where
applicable, each of the stockholders named in this table has sole voting and
investment power with respect to the shares indicated as beneficially owned.
Applicable percentages are based on 28,320,525 shares outstanding on
September 30, 1996, adjusted as required by rules promulgated by the
Securities and Exchange Commission ("SEC"). Except as shown otherwise in the
table, the address of each stockholder listed is in care of the Company at
9373 Towne Centre Drive, San Diego, California 92121.
(2) Includes shares which certain executive officers, directors and principal
stockholders of the Company have the right to acquire within 60 days after
the date of this table pursuant to outstanding options and warrants, as
follows: Dr. Beynon, 144,157 shares; Dr. Blair, 13,209 shares; Mr. Cook,
157,708 shares; Mr. Duft, 88,224 shares; Mr. Gaither, 10,725 shares; Mr.
Greene, 265,373 shares; Ms. Howard, 10,725 shares; Mr. Kailian, 10,725
shares; Dr. Kolterman, 108,442 shares; Ms. Sennett, 134,671 shares; Mr.
Wollaeger, 17,671 shares; and all executive officers and directors as a
group, 1,016,092 shares. These figures do not include shares which certain
executive officers, directors and principal stockholders of the Company have
a right to acquire 60 days or more after the date of this table pursuant to
outstanding options and warrants as follows: Dr. Beynon, 53,350 shares; Dr.
Blair, 7,329 shares; Mr. Cook, 42,292 shares; Dr. Denaro, 125,000 shares;
Mr. Duft, 36,776 shares; Mr. Gaither, 29,275 shares; Mr. Greene, 74,267; Mr.
Haugen,
38
<PAGE> 40
500,000 shares; Ms. Howard, 29,275 shares; Mr. Kailian, 29,275 shares; Dr.
Kolterman, 56,702 shares; Ms. Sennett, 71,209 shares; Mr. Wollaeger, 7,329
shares; and all executive officers and directors as a group, 1,062,079
shares.
(3) Dr. Blair may be deemed to be the beneficial owner of 653,847 shares held of
record by Domain Partners II, L.P. Dr. Blair is a general partner of One
Palmer Square Associates, L.P., the general partner of Domain Partners, and
One Palmer Square Associates II, L.P., the general partner of Domain
Partners II, and shares voting and investment power with respect to such
shares.
(4) Mr. Wollaeger may be deemed to be the beneficial owner of 160,000 shares
held of record by Kingsbury Capital Partners, L.P. Mr. Wollaeger is the
general partner of Kingsbury Associates and Kingsbury Capital Partners,
L.P., and shares voting and investment power with respect to such shares.
(5) Includes 1,411,500 shares as to which Wellington Management Company ("WMC")
has shared voting power and 3,078,300 shares as to which WMC has shared
dispositive power.
39
<PAGE> 41
DESCRIPTION OF CAPITAL STOCK
GENERAL
The authorized capital stock of the Company consists of 50,000,000 shares
of Common Stock, par value $.001, and 7,500,000 shares of Preferred Stock, par
value $.001. At the close of business on September 30, 1996, there were
28,320,525 shares of Common Stock outstanding and no shares of Preferred Stock
outstanding.
PREFERRED STOCK
The Board of Directors has the authority, without further action by the
stockholders, to issue up to 7,500,000 shares of Preferred Stock in one or more
series and to fix the rights, preferences, privileges and restrictions thereof,
including dividend rights, conversion rights, voting rights, terms of
redemption, liquidation preference, sinking fund terms and the number of shares
constituting any series or the designation of such series, without any further
vote or action by stockholders. The issuance of Preferred Stock could adversely
affect the voting power of holders of Common Stock and the likelihood that such
holders will receive dividend payments and payments upon liquidation and could
have the effect of delaying, deferring or preventing a change in control of the
Company.
COMMON STOCK
All issued and outstanding shares of Common Stock of the Company, including
the shares offered hereby, are fully paid and nonassessable. Holders of Common
Stock have no preemptive, subscription or conversion rights and are not liable
for further calls or assessments. There are no redemption or sinking fund
provisions in effect with respect to the Common Stock. Subject to the rights of
any holders of then-outstanding Preferred Stock, holders of Common Stock are
entitled to receive such dividends as may be declared by the Board of Directors
out of funds legally available therefor and to share ratably in the assets
available for distribution upon liquidation. Except as described below, each
share of Common Stock is entitled to one vote at all meetings of stockholders.
The holders of Common Stock are not entitled to cumulative voting rights in the
election of directors.
The Company has paid no cash dividends on its Common Stock since its
incorporation and anticipates that for the foreseeable future it will continue
to retain any earnings for use in its business. The Common Stock of the Company
is traded on the Nasdaq National Market under the symbol "AMLN." The transfer
agent for the Common Stock is First Interstate Bank of California.
DELAWARE LAW AND CERTAIN CHARTER PROVISIONS
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law (the "Delaware Law"), an anti-takeover law. In general,
the statute prohibits a publicly held Delaware corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
For purposes of Section 203, a "business combination" includes a merger, asset
sale or other transaction resulting in a financial benefit to the interested
stockholder, and an "interested stockholder" is a person who, together with
affiliates and associates, owns (or within three years prior, did own) 15% or
more of the corporation's voting stock.
The Company's Certificate of Incorporation contains a provision (the "Fair
Price Provision") that requires the approval of holders of 66% of the Company's
voting stock as a condition to a merger or certain other business transactions
with, or proposed by, a holder of 15% or more of the Company's voting stock ( an
"Interested Stockholder"), except in cases where the Continuing Directors
approve the transaction or certain minimum price criteria and other procedural
requirements are met. A "Continuing Director" is a director originally elected
upon incorporation of the Company or a director who is not an Interested
Stockholder or affiliated with an Interested Stockholder or whose nomination or
election to the Board of Directors is recommended or approved by a majority of
the Continuing Directors. The minimum price criteria generally require that, in
a transaction in which stockholders are to receive payments, holders of Common
Stock must receive a value equal to the highest price paid by the Interested
Stockholder for Common Stock during the prior two years and that such payment be
made
40
<PAGE> 42
in cash or in the type of consideration paid by the Interested Stockholder for
the greatest portion of its shares. The Company's Board of Directors believes
that the Fair Price Provision will help assure that all of the Company's
stockholders will be treated similarly if certain kinds of business combinations
are effected. However, the Fair Price Provision may make it more difficult to
accomplish certain transactions that are opposed by the incumbent Board of
Directors and that could be beneficial to stockholders.
The Company's Certificate of Incorporation also requires that any action
required or permitted to be taken by stockholders of the Company must be
effected at a duly called annual or special meeting of stockholders and may not
be effected by a consent in writing. In addition, special meetings of the
stockholders of the Company may be called only by the Board of Directors, the
Chief Executive Officer of the Company or by any person or persons holding
shares representing at least 10% of the outstanding capital stock. The Company's
Certificate of Incorporation also provides that the authorized number of
directors may be changed only by resolution of the Board of Directors. These
provisions may have the effect of deterring hostile takeovers or delaying
changes in control or management of the Company.
41
<PAGE> 43
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), for whom UBS Securities LLC,
Hambrecht & Quist LLC and Vector Securities International, Inc. are acting as
representatives (the "Representatives"), have agreed to purchase from the
Company the following respective number of shares of Common Stock:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITER SHARES
------------------------------------------------------------------ ---------
<S> <C>
UBS Securities LLC................................................
Hambrecht & Quist LLC.............................................
Vector Securities International, Inc..............................
---------
Total................................................... 1,500,000
---------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent, including the absence
of any material adverse change in the Company's business and the receipt of
certain certificates, opinions and letters from the Company and its counsel. The
nature of the Underwriters' obligation is such that they are committed to
purchase all shares of Common Stock offered hereby if any of such shares are
purchased. The Underwriting Agreement contains certain provisions whereby if any
Underwriter defaults in its obligation to purchase shares, and the aggregate
obligations of the Underwriters so defaulting do not exceed 10% of the shares of
Common Stock offered hereby, the remaining Underwriters, or some of them, must
assume such obligations.
The Representatives have advised the Company that the Underwriters propose
to offer the shares of Common Stock directly to the public initially at the
offering price set forth on the cover page of this Prospectus and to certain
dealers at such price less concession not in excess of $ per share. The
Underwriters may allow and such dealers may reallow a concession not in excess
of $ per share to certain other dealers. After the initial public
offering of the shares of Common Stock, the offering price and other selling
terms may be changed by the Underwriters.
The Company has granted to the Underwriters an option, exercisable no later
than 30 days after the date of this Prospectus, to purchase up to 225,000
additional shares of Common Stock to cover over-allotments, if any, at the
public offering price, set forth on the cover page of this Prospectus, less the
underwriting discounts and commissions. To the extent that the Underwriters
exercise such option, each of the Underwriters will have a firm commitment to
purchase approximately the same percentage thereof which the number of shares of
Common Stock to be purchased by it shown in the above table bears to the total
number of shares of Common Stock offered hereby. The Company will be obligated,
pursuant to the option, to sell such shares to the Underwriters to the extent
the option is exercised.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, and to contribute
to payments the Underwriters may be required to make in respect thereof.
Johnson & Johnson has committed to purchase an aggregate of $15 million of
shares of Common Stock in a private placement at the public offering price
(estimated to be 1,153,846 shares assuming a public offering price of $13.00 per
share). The sale of the Johnson & Johnson Shares by the Company will not be
registered in this Offering or covered by the Underwriting Agreement, and the
Underwriters will not receive any fee in connection with the sale of such
shares. Johnson & Johnson has agreed to purchase such shares upon the closing of
this Offering.
At the request of the Company, the Underwriters have reserved approximately
$900,000 of the shares offered hereby (estimated to be 69,230 shares assuming a
public offering price of $13.00 per share) for sale at the public offering price
to directors and executive officers of the Company. The number of shares of
Common Stock available for sale to the public will be reduced to the extent such
persons purchase such reserved shares. Any reserved shares not so purchased will
be offered by the Underwriters to the general public on the same basis as the
other shares offered hereby.
42
<PAGE> 44
The Company's executive officers and directors, who will beneficially own
in the aggregate approximately 3,958,886 shares of Common Stock after the
Offering, and Johnson & Johnson, which after the Offering will own 3,109,253
shares of Common Stock (assuming a public offering price of $13.00 per share),
have agreed that, except as noted below, they will not, without the prior
written consent of UBS Securities LLC, during the period ending 90 days after
the date of this Prospectus, (i) sell, offer, contract to sell, make any short
sale, pledge, sell any option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to purchase or otherwise
transfer or dispose of any shares of Common Stock or any securities convertible
into or exchangeable or exercisable for or any rights to purchase or acquire
Common Stock, or (ii) enter into any swap or other agreement that transfers, in
whole or in part, any of the economic consequences of ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing agreement does not apply to an aggregate of 50,000
shares held by the executive officers and directors of the Company. In addition,
in connection with the agreement by the Company and Glaxo-Wellcome, Inc.
("Glaxo") to discontinue their research and development collaboration regarding
amylin blocker technology, Glaxo agreed not to sell or otherwise transfer prior
to December 30, 1996 any of the 362,319 shares of the Company's Common Stock
purchased by Glaxo pursuant to that agreement. The Company has agreed that it
will not, without the prior written consent of UBS Securities LLC, offer, sell
or otherwise dispose of any shares of Common Stock, options or warrants to
acquire shares of Common Stock or securities exchangeable for or convertible
into shares of Common Stock during the 90-day period following the date of this
Prospectus, except that the Company may issue stock upon the exercise of options
granted prior to the date hereof, and may issue additional stock and grant
additional options, under its stock option and stock purchase plans in effect on
the date hereof.
In general, the rules of the Commission will prohibit the Underwriters from
making a market in the Company's Common Stock during the "cooling off" period
immediately preceding the commencement of sales in the Offering. The Commission
has, however, adopted exemptions from these rules that permit passive market
making under certain conditions. These rules permit an underwriter to continue
to make a market subject to the conditions, among others, that its bid not
exceed the highest bid by a market maker not connected with the Offering and
that its net purchases on any one trading day not exceed prescribed limits.
Pursuant to these exemptions, the Underwriters, selling group members (if any)
or their respective affiliates may engage in passive market making in the
Company's Common Stock during the cooling off period.
LEGAL MATTERS
The validity of the Common Stock offered hereby will be passed upon for the
Company by Cooley Godward LLP, San Diego, California, and for the Underwriters
by Davis Polk & Wardwell, New York, New York.
EXPERTS
The consolidated financial statements of Amylin Pharmaceuticals, Inc.
incorporated by reference in the Company's Annual Report (Form 10-K) for the
year ended December 31, 1995, have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon incorporated by
reference therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given upon the authority of such firm as experts in accounting and
auditing.
The statements in this Prospectus under the captions "Risk
Factors -- Patents and Proprietary Rights" and "Business -- Patents, Proprietary
Rights, and Licenses" have been reviewed and approved by Lyon & Lyon LLP, as
experts in such matters, and are included herein in reliance upon such review
and approval.
43
<PAGE> 45
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company with the Commission in
accordance with the Exchange Act may be inspected without charge at the Public
Reference Section of the Commission at Room 1024, 450 Fifth Street, N.W.,
Judiciary Plaza, Washington, D.C. 20549, and at the Commission's following
Regional Offices: Chicago Regional Office, Suite 1400, Northwest Atrium Center,
500 West Madison Street, Chicago, Illinois 60661; and the New York Regional
Office, Seven World Trade Center, Suite 1300, New York, New York 10048. Copies
of such material can be obtained at prescribed rates from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Judiciary Plaza,
Washington, D.C. 20549. The Commission also maintains a site on the World Wide
Web that contains reports, proxy and information statements and other
information regarding the Company. The address for such site is
http://www.sec.gov.
Additional information regarding the Company and the shares offered hereby
is contained in the Registration Statement on Form S-3 and the exhibits thereto
filed with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"). For further information pertaining to the Company and the
shares, reference is made to the Registration Statement and the exhibits
thereto, which may be inspected without charge at, and copies thereof may be
obtained at prescribed rates from, the office of the Commission at 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. 20549.
The AMYLIN logo is a trademark of the Company. All other brand names or
trademarks appearing in this Prospectus are the property of their respective
holders.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended December
31, 1995, the Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1996, and the Company's Registration Statement on Form 8-A
dated November 27, 1991 filed by the Company with the Commission are hereby
incorporated by reference in this Prospectus except as superseded or modified
herein. All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the Offering of the shares offered
hereby shall be deemed to be incorporated by reference into this Prospectus and
to be a part hereof from the date of filing of such documents. Any statement
contained in any document incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as modified or superseded, to
constitute a part of this Prospectus. The Company will provide without charge to
each person, including any beneficial owner to whom this Prospectus is
delivered, upon written or oral request of such person, a copy of any and all of
the documents that have been or may be incorporated by reference herein (other
than exhibits to such documents which are not specifically incorporated by
reference into such documents). Such requests should be directed to the Chief
Financial Officer at the Company's principal executive offices at 9373 Towne
Centre Drive, San Diego, California 92121 (telephone (619) 552-2200).
44
<PAGE> 46
No dealer, salesperson or any other person has been authorized to give any
information or make any representation not contained in this Prospectus in
connection with the offer made by this Prospectus and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Underwriters. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any of the securities offered
hereby to anyone in any jurisdiction in which such offer or solicitation is not
authorized or in which the person making such offer or solicitation is not
qualified to do so or to anyone to whom it is unlawful to make such offer or
solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date of this
Prospectus.
---------------------------
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 6
Use of Proceeds....................... 11
Price Range of Common Stock........... 12
Dividend Policy....................... 12
Capitalization........................ 13
Dilution.............................. 14
Selected Consolidated Financial
Data................................ 15
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 16
Business.............................. 20
Management............................ 34
Security Ownership of Certain
Beneficial Owners and Management.... 38
Description of Capital Stock.......... 40
Underwriting.......................... 42
Legal Matters......................... 43
Experts............................... 43
Available Information................. 44
Incorporation of Certain Documents by
Reference........................... 44
</TABLE>
1,500,000 SHARES
LOGO
COMMON STOCK
---------------------------------
PROSPECTUS
OCTOBER , 1996
---------------------------------
UBS SECURITIES
HAMBRECHT & QUIST
VECTOR SECURITIES INTERNATIONAL, INC.
<PAGE> 47
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the Common Stock being registered. All the amounts
shown are estimates except for the SEC registration fee.
<TABLE>
<S> <C>
SEC Registration fee.............................. $ 6,763
NASD filing fee................................... $ 2,732
Nasdaq National Market Listing Application Fee.... $ 17,500
Blue sky qualification fees and expenses.......... $ 10,000
Printing and engraving expenses................... $ 50,000
Legal fees and expenses........................... $ 100,000
Accounting fees and expenses...................... $ 30,000
Miscellaneous..................................... $ 33,005
--------
Total........................................... $ 250,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its Directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act").
The Registrant's Certificate of Incorporation and By-laws include
provisions to (i) eliminate the personal liability of its directors for monetary
damages resulting from breaches of their fiduciary duty to the extent permitted
by Section 102(b)(7) of the General Corporation Law of Delaware (the "Delaware
Law") and (ii) require the Registrant to indemnify its Directors and officers to
the fullest extent permitted by Section 145 of the Delaware Law, including
circumstances in which indemnification is otherwise discretionary. Pursuant to
Section 145 of the Delaware Law, a corporation generally has the power to
indemnify its present and former directors, officers, employees and agents
against expenses incurred by them in connection with any suit to which they are
or are threatened to be made, a party by reason of their serving in such
positions so long as they acted in good faith and in a manner they reasonably
believed to be in or not opposed to, the best interests of the corporation and
with respect to any criminal action, they had no reasonable cause to believe
their conduct was unlawful. The Registrant believes that these provisions are
necessary to attract and retain qualified persons as Directors and officers.
These provisions do not eliminate the Directors' duty of care, and, in
appropriate circumstances, equitable remedies such as injunctive or other forms
of non-monetary relief will remain available under Delaware Law. In addition,
each Director will continue to be subject to liability for breach of the
Director's duty of loyalty to the Registrant, for acts or omissions not in good
faith or involving intentional misconduct, for knowing violations of law, for
acts or omissions that the Director believes to be contrary to the best
interests of the Registrant or its stockholders, for any transaction from which
the Director derived an improper personal benefit, for acts or omissions
involving a reckless disregard for the Director's duty to the Registrant or its
stockholders when the Director was aware or should have been aware of a risk of
serious injury to the Registrant or its stockholders, for acts or omissions that
constitute an unexcused pattern of inattention that amounts to an abdication of
the Director's duty to the Registrant or its stockholders, for improper
transactions between the Director and the Registrant and for improper
distributions to stockholders and loans to Directors and officers. The provision
also does not affect a Director's responsibilities under any other law, such as
the federal securities law or state or federal environmental laws.
The Registrant has entered into indemnity agreements with each of its
Directors and executive officers that require the Registrant to indemnify such
persons against expenses, judgments, fines, settlements and other amounts
incurred (including expenses of a derivative action) in connection with any
proceeding, whether actual or threatened, to which any such person may be made a
party by reason of the fact that such person is or was a
II-1
<PAGE> 48
Director or an executive officer of the Registrant or any of its affiliated
enterprises, provided such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of the
Registrant and, with respect to any criminal proceeding, had no reasonable cause
to believe his conduct was unlawful. The indemnification agreements also set
forth certain procedures that will apply in the event of a claim for
indemnification thereunder.
At present, there is no pending litigation or proceeding involving a
Director or officer of the Registrant as to which indemnification is being
sought nor is the Registrant aware of any threatened litigation that may result
in claims for indemnification by any officer or Director.
The Registrant has an insurance policy covering the officers and Directors
of the Registrant with respect to certain liabilities, including liabilities
arising under the Securities Act or otherwise.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ ------------------------------------------------------------------------------
<S> <C>
1.1 Form of Underwriting Agreement
4.1 Amended and Restated Certificate of Incorporation.(1)
4.2 Amended and Restated Bylaws.(1)
5.1 Opinion of Cooley Godward LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1.
23.3 Consent of Lyon & Lyon LLP
24.1 Power of Attorney. Reference is made to page II-3.
</TABLE>
- ---------------
(1) Filed as an exhibit to the Registration Statement on Form S-1 (No. 33-44195)
or amendments thereto and incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to provisions described in Item 15 or otherwise, the registrant has
been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the Act,
each filing of the registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to
the securities offered therein and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(2) That, for purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
(3) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-2
<PAGE> 49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on October 15, 1996.
AMYLIN PHARMACEUTICALS, INC.
By: /s/ Richard M. Haugen
----------------------------------
Richard M. Haugen
President, Chief Executive Officer
and Director
(Principal Executive Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Howard E. Greene, Jr., Richard M. Haugen
and Marjorie T. Sennett and each of them, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments,
exhibits thereto and other documents in connection therewith) to this
Registration Statement and any subsequent registration statement filed by the
registrant pursuant to Rule 462(b) of the Securities Act of 1933, as amended,
which relates to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Howard E. Greene Jr. Chairman of the Board and October 15, 1996
------------------------------------ Director
Howard E. Greene Jr.
/s/ Richard M. Haugen President, Chief Executive October 15, 1996
------------------------------------ Officer and Director
Richard M. Haugen (Principal Executive
Officer)
/s/ Marjorie T. Sennett Vice President, Chief October 15, 1996
------------------------------------ Financial Officer and
Marjorie T. Sennett Assistant Secretary
(Principal Financial
Officer)
/s/ Karl H. Olsen Treasurer and Controller October 15, 1996
------------------------------------ (Principal Accounting
Karl H. Olsen Officer)
/s/ James C. Blair Director October 15, 1996
------------------------------------
James C. Blair
</TABLE>
II-3
<PAGE> 50
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Joseph C. Cook, Jr. Director October 15, 1996
-------------------------------------
Joseph C. Cook, Jr.
/s/ James C. Gaither Director October 15, 1996
--------------------------------------
James C. Gaither
/s/ Ginger L. Howard Director October 15, 1996
--------------------------------------
Ginger L. Howard
/s/ Vaughn M. Kailian Director October 15, 1996
--------------------------------------
Vaughn M. Kailian
/s/ Timothy J. Wollaeger Director October 15, 1996
--------------------------------------
Timothy J. Wollaeger
</TABLE>
II-4
<PAGE> 51
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DESCRIPTION PAGE NO.
------ --------------------------------------------------------------------- ----------
<S> <C> <C>
1.1 Form of Underwriting Agreement.......................................
4.1 Amended and Restated Certificate of Incorporation(1).................
4.2 Amended and Restated Bylaws(1).......................................
5.1 Opinion of Cooley Godward LLP........................................
23.1 Consent of Ernst & Young LLP, Independent Auditors...................
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit 5.1......
23.3 Consent of Lyon & Lyon LLP...........................................
24.1 Power of Attorney. Reference is made to page II-3....................
</TABLE>
- ---------------
(1) Filed as an exhibit to the Registration Statement on Form S-1 (No. 33-44195)
or amendments thereto and incorporated herein by reference.
<PAGE> 1
Exhibit 1.1
________ Shares
AMYLIN PHARMACEUTICALS, INC
Common Stock
UNDERWRITING AGREEMENT
____________ __, 1996
UBS SECURITIES LLC
HAMBRECHT & QUIST LLC
VECTOR SECURITIES INTERNATIONAL, INC.
c/o UBS Securities LLC
299 Park Avenue
New York, NY 10171
Ladies and Gentlemen:
Amylin Pharmaceuticals, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell 1,500,000 shares (the "Firm Shares") of its
authorized but unissued Common Stock, $.001 par value per share (the "Common
Stock"), to the several underwriters listed on Schedule A to this Agreement
(collectively, the "Underwriters"). In addition, the Company proposes to
concurrently issue and sell $15 million of shares (herein called the Johnson &
Johnson Shares) of its Common Stock (_____ shares) to Johnson & Johnson
Development Corporation (herein called JJDC), a wholly owned subsidiary of
Johnson & Johnson. The Company also proposes to grant to the Underwriters an
option to purchase up to 225,000 additional shares (the "Option Shares") of
Common Stock on the terms and for the purposes set forth in Section 3(c). The
Firm Shares and the Option Shares are hereinafter collectively referred to as
the "Shares."
The Company wishes to confirm as follows its agreements with you (the
"Representatives") and the other Underwriters on whose behalf you are acting in
connection with the several purchases by the Underwriters of the Shares.
1. REGISTRATION STATEMENT. A registration statement on Form S-3 (File
No. 333- ) including a prospectus relating to the Shares and each
amendment
<PAGE> 2
thereto has been prepared by the Company in conformity with the requirements of
the Securities Act of 1933, as amended (the "Act"), and the rules and
regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") thereunder, and has been filed with the
Commission. There have been delivered to you four signed copies of such
registration statement and amendments, together with four copies of each
exhibit filed therewith. Copies of such registration statement and amendments
(but without exhibits) and of the related preliminary prospectus have been
delivered to you in such reasonable quantities as you have requested for each
of the Underwriters. If such registration statement has not become effective,
a further amendment to such registration statement, including a form of final
prospectus, necessary to permit such registration statement to become effective
will be filed promptly by the Company with the Commission. If such
registration statement has become effective, a final prospectus containing all
Rule 430A Information (as hereinafter defined) will be filed by the Company
with the Commission in accordance with Rule 424(b) of the Rules and Regulations
on or before the second business day after the date hereof (or such earlier
time as may be required by the Rules and Regulations).
The term "Registration Statement" as used in this Agreement shall mean
such registration statement (including all exhibits and financial statements
and all documents incorporated by reference therein) at the time such
registration statement becomes or became effective (the "Effective Date") and,
in the event any post-effective amendment thereto becomes effective prior to
the Closing Date (as hereinafter defined), shall also mean such registration
statement as so amended; provided, however, that such term shall include all
Rule 430A Information deemed to be included in such registration statement at
the time such registration statement becomes effective as provided by Rule 430A
of the Rules and Regulations and shall also mean any registration statement
filed pursuant to Rule 462(b) of the Rules and Regulations with respect to the
Shares. The term "Preliminary Prospectus" shall mean any preliminary
prospectus (including the documents incorporated by reference therein) referred
to in the preceding paragraph and any preliminary prospectus included in the
Registration Statement at the time it becomes effective that omits Rule 430A
Information. The term "Prospectus" as used in this Agreement shall mean the
prospectus (including the documents incorporated by reference therein) relating
to the Shares in the form in which it is first filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations or, if no filing pursuant
to Rule 424(b) of the Rules and Regulations is required, shall mean the form of
final prospectus included in the Registration Statement at the time such
registration statement becomes effective. The term "Rule 430A Information"
means information with respect to the Shares and the offering thereof permitted
to be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A of the Rules and Regulations.
2
<PAGE> 3
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants as follows:
(a) Each of the Company and Amylin Europe Limited, a corporation
organized under the laws of England and Wales ("Amylin Europe"), has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has full corporate power and
authority to own or lease its properties and conduct its business as described
in the Registration Statement and the Prospectus and as being conducted, and is
duly qualified as a foreign corporation and in good standing in all
jurisdictions in which the character of the property owned or leased or the
nature of the business transacted by it makes qualification necessary (except
where the failure to be so qualified would not have a material adverse effect
on the business, properties, financial condition or results of operations of
the Company and its subsidiaries, taken as a whole); Amylin Europe is the
Company's only subsidiary.
(b) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, there has not been any materially
adverse change in the business, properties, financial condition or results of
operations of the Company and Amylin Europe, taken as a whole, whether or not
arising from transactions in the ordinary course of business, other than as set
forth in the Registration Statement and the Prospectus, and since such dates,
except in the ordinary course of business, neither the Company nor Amylin
Europe has entered into any material transaction not referred to in the
Registration Statement and the Prospectus.
(c) The Registration Statement and the Prospectus comply, and on the
Closing Date (as hereinafter defined) and any later date on which Option Shares
are to be purchased, the Prospectus will comply, in all material respects, with
the provisions of the Act and the Securities Exchange Act of 1934, as amended
(herein called the Exchange Act) and the rules and regulations of the
Commission thereunder; on the Effective Date, the Registration Statement did
not contain any untrue statement of a material fact and did not omit to state
any material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and, on the Effective Date the
Prospectus did not and, on the Closing Date and any later date on which Option
Shares are to be purchased, will not contain any untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided, however, that none of the representations and
warranties in this subparagraph (c) shall apply to statements in, or omissions
from, the Registration Statement or the Prospectus made in reliance upon and in
conformity with information herein or otherwise
3
<PAGE> 4
furnished in writing to the Company by or on behalf of the Underwriters for use
in the Registration Statement or the Prospectus.
(d) The Shares, when issued and sold to the Underwriters as provided
herein, will be duly and validly issued, fully paid and nonassessable and
conforms to the description thereof in the Prospectus. No further approval or
authority of the stockholders or the Board of Directors of the Company will be
required for the issuance and sale of the Shares as contemplated herein.
(e) Prior to the Closing Date the Shares to be issued and sold by the
Company will be authorized for inclusion on The Nasdaq National Market upon
official notice of issuance.
(f) This Agreement has been duly authorized, executed and delivered by
the Company.
(g) The execution and delivery by the Company of, and the performance
by the Company of its obligations under, this Agreement will not contravene any
provision of applicable law or the certificate of incorporation or by-laws of
the Company or any material agreement or other material instrument binding upon
the Company, or any judgment, order or decree of any governmental body, agency
or court having jurisdiction over the Company, and no consent, approval or
authorization or order of, or qualification with, any governmental body or
agency is required for the performance by the Company of its obligations under
this Agreement, except such as may be required by the securities or Blue Sky
laws of the various states in connection with the offer and sale of the Shares.
(h) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of the properties of
the Company is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(i) Each of the Company and Amylin Europe has all necessary consents,
authorizations, approvals, orders, certificates and permits of and from, and
has made all declarations and filings with, all federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals, to own, lease, license and use its properties and assets and
to conduct its business in the manner described in the Prospectus.
4
<PAGE> 5
(j) There are no rights of any person, corporation, partnership or
other entity not effectively satisfied or waived, to require registration of
any shares of Common Stock or any other securities of the Company in connection
with the filing of the Registration Statement.
(k) The Company owns or possesses, or believes it can acquire on
reasonable terms, all material patents (or foreign equivalents), trademarks,
copyrights and proprietary, confidential information or licenses to any of the
foregoing currently required by it in connection with its business except such
as the failure to so own, possess or acquire would not have a material adverse
affect on the Company. In connection with the filing of its patent
applications, when it deemed necessary the Company conducted reasonable
investigations of the published literature and patent references relating to
the inventions claimed in such applications. There are no enforceable United
States or foreign patents known to the Company on the basis of a reasonable
monitoring of patents issued in the United States which the Company believes to
be infringed by its present activities or which would preclude the pursuit of
its business as described in the Prospectus. Except as disclosed in the
Prospectus, the Company has not has received any notice of infringement of or
conflict with asserted rights of any third party with respect to any of the
foregoing.
(l) Neither the Company nor Amylin Europe is in violation of its
certificate of incorporation or by-laws, or in violation of any applicable
statute, judgment, decree, order, rule or regulation, which, singly or in the
aggregate, would result in a material adverse change in the condition,
financial or otherwise, or in the prospects, earnings, business or operations
of the Company and Amylin Europe, taken as a whole. No default exists, and no
event has occurred which, with notice or lapse of time or both, would
constitute a default, in the due performance and observance of any term,
covenant or condition of any material indenture, mortgage, deed of trust, lease
or other material agreement or instrument to which the Company or Amylin Europe
is a party or by which the Company, Amylin Europe or any of their properties is
bound or may be affected in any respect which would result in a materially
adverse change in the condition, financial or otherwise, or in the prospects,
earnings, business or operations of the Company and Amylin Europe, taken as a
whole.
(m) Each Preliminary Prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the rules and regulations of the
Commission thereunder.
5
<PAGE> 6
(n) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(o) Each of the Company and Amylin Europe is (i) in compliance with
any and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) has received all permits, licenses or other
approvals required of it under applicable Environmental Laws to conduct its
business and (iii) is in compliance with all terms and conditions of any such
permit, license or approval, except where such noncompliance with Environmental
Laws, failure to receive required permits, licenses or other approvals or
failure to comply with the terms and conditions of such permits, licenses or
approvals would not, singly or in the aggregate, result in a material adverse
effect on the condition, financial or otherwise, or on the earnings, business,
prospects or operations of the Company and Amylin Europe, taken as a whole.
(p) In the ordinary course of its business, the Company conducts a
periodic review of the effect of Environmental Laws on the business, operations
and properties of the Company and Amylin Europe, in the course of which it
identifies and evaluates associated costs and liabilities (including, without
limitation, any capital or operating expenditures required for clean-up,
closure of properties or compliance with Environmental Laws or any permit,
license or approval, any related constraints on operating activities and any
potential liabilities to third parties). On the basis of such review, the
Company has reasonably concluded that such associated costs and liabilities
would not, singly or in the aggregate, have a material adverse effect on the
condition, financial or otherwise, or on the earnings, business, prospects or
operations of the Company and Amylin Europe, taken as a whole.
(q) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
3. PURCHASE OF THE SHARES BY THE UNDERWRITERS.
(a) On the basis of the representations and warranties and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell the Firm Shares to the several Underwriters, and each of the
Underwriters agrees to purchase from the Company the respective aggregate
number of Firm Shares set forth opposite its name on Schedule A, plus such
additional number of Firm Shares which such Underwriter may become obligated to
purchase pursuant to Section 3(b) hereof. The price at which such Firm Shares
shall be sold by the
6
<PAGE> 7
Company and purchased by the several Underwriters shall be $_____ per share.
In making this Agreement, each Underwriter is contracting severally and not
jointly; except as provided in paragraphs (b) and (c) of this Section 3, the
agreement of each Underwriter is to purchase only the respective number of Firm
Shares set forth opposite its name on Schedule A.
(b) If for any reason one or more of the Underwriters shall
fail or refuse (otherwise than for a reason sufficient to justify the
termination of this Agreement under the provisions of Section 10 hereof) to
purchase and pay for the number of Shares agreed to be purchased by such
Underwriter or Underwriters, the non-defaulting Underwriters shall have the
right within twenty-four (24) hours after such default to purchase, or procure
one or more other Underwriters to purchase, in such proportions as may be
agreed upon between you and such purchasing Underwriter or Underwriters and
upon the terms herein set forth, all or any part of the Shares which such
defaulting Underwriter or Underwriters agreed to purchase. If the
non-defaulting Underwriters fail so to make such arrangements with respect to
all such Shares, the number of Shares which each non-defaulting Underwriter is
otherwise obligated to purchase under this Agreement shall be automatically
increased on a pro rata basis (as adjusted by you in such manner as you deem
advisable to avoid fractional shares) to absorb the remaining shares and
portion which the defaulting Underwriter or Underwriters agreed to purchase;
provided, however, that the non-defaulting Underwriters shall not be obligated
to purchase the Shares which the defaulting Underwriter or Underwriters agreed
to purchase if the aggregate number of such Shares exceeds 10% of the total
number of Shares which all Underwriters agreed to purchase hereunder. If the
total number of Shares which the defaulting Underwriter or Underwriters agreed
to purchase shall not be purchased or absorbed in accordance with the two
preceding sentences, the Company shall have the right, within twenty-four (24)
hours next succeeding the 24-hour period referred to above, to make
arrangements with other underwriters or purchasers reasonably satisfactory to
you for purchase of such Shares on the terms herein set forth. In any such
case, either you or the Company shall have the right to postpone the Closing
Date determined as provided in Section 5 hereof for not more than seven
business days after the date originally fixed as the Closing Date pursuant to
said Section 5 in order that any necessary changes in the Registration
Statement, the Prospectus or any other documents or arrangements may be made.
If the aggregate number of Shares which the defaulting Underwriter or
Underwriters agreed to purchase exceeds 10% of the total number of Shares which
all Underwriters agreed to purchase hereunder, and if neither the
non-defaulting Underwriters nor the Company shall make arrangements within the
24-hour periods stated above for the purchase of all the Shares which the
defaulting Underwriter or Underwriters agreed to purchase hereunder, this
Agreement shall be terminated without further act or deed and without any
liability on the part of the Company to any non-defaulting Underwriter
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<PAGE> 8
and without any liability on the part of any non-defaulting Underwriter to the
Company. Nothing in this paragraph (b), and no action taken hereunder, shall
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
(c) On the basis of the representations, warranties and
covenants herein contained, and subject to the terms and conditions herein set
forth, the Company grants an option to the several Underwriters to purchase all
or any portion of the Option Shares from the Company at the same price per
share as the Underwriters shall pay for the Firm Shares. Said option may be
exercised only to cover over-allotments in the sale of the Firm Shares by the
Underwriters and may be exercised in whole or in part at any time (but not more
than once) on or before the 30th day after the date of this Agreement upon
written or telegraphic notice by you to the Company setting forth the aggregate
number of shares of the Option Shares as to which the several Underwriters are
exercising the option. Delivery of certificates for the shares of Option
Shares, and payment therefor, shall be made as provided in Section 5 hereof.
Each Underwriter will purchase such percentage of the Option Shares as is equal
to the percentage of Firm Shares that such Underwriter is purchasing, the exact
number of shares to be adjusted by you in such manner as you deem advisable to
avoid fractional shares.
4. OFFERING BY UNDERWRITERS.
(a) The terms of the initial public offering of the Shares by
the Underwriters shall be as set forth in the Prospectus. The Underwriters may
from time to time change the public offering prices after the initial public
offering and increase or decrease the concessions and discounts to dealers as
they may determine.
(b) You, on behalf of the Underwriters, represent and warrant
that (i) the information set forth in the last paragraph on the front cover
page and paragraph __ under the caption "Underwriting" in the Registration
Statement, any Preliminary Prospectus and the Prospectus relating to the Shares
(insofar as such information relates to the Underwriters) constitutes the only
information furnished by the Underwriters to the Company for inclusion in the
Registration Statement, any Preliminary Prospectus, and the Prospectus, and
that the statements made therein are correct and do not omit to state any
material fact required to be stated therein or necessary to make the statements
made therein in light of the circumstances under which they were made not
misleading, and (ii) the Underwriters have not distributed and will not
distribute prior to the Closing Date or on any Option Closing Date, as the case
may be, any offering material in connection with the offering and sale of the
Shares other than the Preliminary
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<PAGE> 9
Prospectus, the Prospectus, the Registration Statement and other materials
permitted by the Act.
5. DELIVERY OF AND PAYMENT FOR THE SHARES.
(a) Delivery of certificates for the Firm Shares and the
Option Shares (if the option granted pursuant to Section 3(c) hereof shall have
been exercised not later than [7:00 a.m., San Diego time], on the date at least
two business days preceding the Closing Date), and payment therefor, shall be
made at the office of [Cooley Godward LLP, 4365 Executive Drive, Suite 1200,
San Diego, California 92121], [7:00 a.m. San Diego] time, on the [third]
business day after the date of this Agreement, or at such time on such other
day, not later than seven full business days after such [third] business day,
as shall be agreed upon in writing by the Company and you (the "Closing Date").
(b) If the option granted pursuant to Section 3(c) hereof
shall be exercised after [7:00 a.m., San Diego time], on the date two business
days preceding the Closing Date, and on or before the 30th day after the date
of this Agreement, delivery of certificates for the Option Shares, and payment
therefor, shall be made at the office of [Cooley Godward LLP, 4365
Executive Drive, Suite 1200, San Diego, California 92121], at 7:00 a.m. San
Diego time, on the third business day after the exercise of such option.
(c) Payment for the Shares purchased from the Company shall be
made to the Company or its order, by either a same day funds check or Federal
Funds wire transfer. Such payment shall be made upon delivery of certificates
for the Shares to you for the respective accounts of the several Underwriters
against receipt therefor signed by you. Certificates for the Shares to be
delivered to you shall be registered in such name or names and shall be in such
denominations as you may request at least three business days before the
Closing Date, in the case of Firm Shares, and at least two business days prior
to the Option Closing Date, in the case of the Option Shares. Such certificates
will be made available to the Underwriters for inspection, checking and
packaging at a location in New York, New York, designated by the Underwriters
not less than one full business day prior to the Closing Date or, in the case
of the Option Shares, by 3:00 p.m., New York time, on the business day
preceding the Option Closing Date.
It is understood that you, individually and not on behalf of the
Underwriters, may (but shall not be obligated to) make payment to the Company
for shares to be purchased by any Underwriter whose check shall not have been
received by you on the Closing Date or any later Option Closing Date. Any such
payment by you shall not relieve such Underwriter from any of its obligations
hereunder.
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<PAGE> 10
6. FURTHER AGREEMENTS OF THE COMPANY.
The Company covenants and agrees as follows:
(a) The Company will use its best efforts to cause the
Registration Statement and any amendment thereof, if not effective at the time
and date that this Agreement is executed and delivered by the parties hereto,
to become effective as promptly as possible; it will notify you, promptly after
it shall receive notice thereof, of the time when the Registration Statement or
any subsequent amendment to the Registration Statement has become effective or
any supplement to the Prospectus has been filed. If the Company omitted
information from the Registration Statement at the time it was originally
declared effective in reliance upon Rule 430A(a), the Company will provide
evidence satisfactory to you that the Prospectus contains such information and
has been filed, within the time period prescribed, with the Commission pursuant
to subparagraph (1) or (4) of Rule 424(b) of the Rules and Regulations or as
part of a post-effective amendment to such Registration Statement as originally
declared effective which is declared effective by the Commission. If for any
reason the filing of the final form of Prospectus is required under Rule
424(b)(3) of the Rules and Regulations, it will provide evidence satisfactory
to you that the Prospectus contains such information and has been filed with
the Commission within the time period prescribed. The Company will notify you
promptly of any request by the Commission for the amending or supplementing of
the Registration Statement or the Prospectus or for additional information.
Promptly upon your request, it will prepare and file with the Commission any
amendments or supplements to the Registration Statement or Prospectus which, in
the reasonable opinion of counsel to the several Underwriters ("Underwriters'
Counsel"), may be necessary or advisable in connection with the distribution of
the Shares by the Underwriters. The Company will promptly prepare and file
with the Commission, and promptly notify you of the filing of, any amendments
or supplements to the Registration Statement or Prospectus which may be
necessary to correct any statements or omissions, if, at any time when a
prospectus relating to the Shares is required to be delivered under the Act,
any event shall have occurred as a result of which the Prospectus or any other
prospectus relating to the Shares as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading. In case any Underwriter is required to deliver a
prospectus within the nine-month period referred to in Section 10(a)(3) of the
Act in connection with the sale of the Shares, and the Underwriters shall
propose to vary the terms of offering thereof by reason of changes in general
market conditions or otherwise, you will advise the Company in writing of the
proposed variation, and, if in the opinion either of counsel for the Company or
of counsel for the Underwriters such proposed variation requires that the
Prospectus be supplemented or amended, the
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<PAGE> 11
Company will prepare promptly upon request such amendment or amendments to the
Registration Statement and such prospectus or prospectuses as may be necessary
to permit compliance with the requirements of Section 10(a)(3) of the Act. The
Company will file no amendment or supplement to the Registration Statement or
Prospectus that shall not previously have been submitted to you a reasonable
time prior to the proposed filing thereof or to which you shall reasonably
object in writing or which is not in compliance with the Act and Rules and
Regulations or the provisions of this Agreement.
(b) The Company will advise you, promptly after it shall
receive notice or obtain knowledge thereof of the issuance of any stop order by
the Commission suspending the effectiveness of the Registration Statement or
the use of the Prospectus or of the initiation or threat of any proceeding for
that purpose; and it will promptly use its best efforts to prevent the issuance
of any such stop order or to obtain its withdrawal at the earliest possible
moment if such stop order should be issued.
(c) The Company will cooperate with you in endeavoring to
qualify the Shares for offering and sale under the securities laws of such
jurisdictions as you may designate and to continue such qualifications in
effect for so long as may be required for purposes of the distribution of the
Shares, except that the Company shall not be required in connection therewith
or as a condition thereof to qualify as a foreign corporation, or to execute a
general consent to service of process in any jurisdiction, or to make any
undertaking with respect to the conduct of its business. In each jurisdiction
in which the Shares shall have been qualified, the Company will make and file
such statements, reports and other documents as are or may be reasonably
required by the laws of such jurisdictions so as to continue such
qualifications in effect for so long a period as you may reasonably request for
distribution of the Shares, or as otherwise may be required by law.
(d) The Company will furnish to you, as soon as available,
copies of the Registration Statement (four of which will be signed and which
will include all exhibits), each Preliminary Prospectus, the Prospectus and any
amendments or supplements to such documents, including any prospectus prepared
to permit compliance with Section 10(a)(3) of the Act, all in such quantities
as you may from time to time reasonably request.
(e) The Company will make generally available to its
stockholders as soon as practicable, but in any event not later than the 45th
day following the end of the fiscal quarter first occurring after the first
anniversary of the effective date of the Registration Statement, an earnings
statement (which will be in reasonable detail but need not be audited)
complying with the provisions of Section 11(a) of the Act and Rule 158 of the
Rules and Regulations and covering a
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<PAGE> 12
twelve-month period beginning after the effective date of the Registration
Statement, and will advise you in writing when such statement has been made
available.
(f) During a period of five years after the date hereof, the
Company, as soon as practicable after the end of each respective period, will
furnish to its stockholders annual reports (including financial statements
audited by independent certified public accountants) and will furnish to its
stockholders unaudited quarterly reports of operations for each of the first
three quarters of the fiscal year, and will, upon request, furnish to you and
the other several Underwriters hereunder (i) concurrently with making such
reports available to its stockholders, statements of operations of the Company
for each of the first three quarters in the form made available to the
Company's stockholders; (ii) concurrently with the furnishing thereof to its
stockholders, a balance sheet of the Company as of the end of such fiscal year,
together with statements of operations, of stockholders' equity and of cash
flow of the Company for such fiscal year, accompanied by a copy of the
certificate or report thereon of nationally recognized independent certified
public accountants; (iii) concurrently with the furnishing of such reports to
its stockholders, copies of all reports (financial or other) mailed to
stockholders; and (iv) as soon as they are available, copies of all reports and
financial statements furnished to or filed with the Commission, any securities
exchange or The Nasdaq National Market by the Company (except for documents for
which confidential treatment is requested). During such five-year period, if
the Company shall have any active subsidiaries, the foregoing financial
statements shall be on a consolidated basis to the extent that the accounts of
the Company are consolidated with any subsidiaries, and shall be accompanied by
similar financial statements for any significant subsidiary that is not so
consolidated.
(g) Prior to or simultaneously with the execution and delivery
of this Agreement, the Company will obtain agreement from each beneficial owner
of the Company's Common Stock listed on Schedule B to this Agreement providing
that such person will not, for a period of 90 days following the commencement
of the public offering of the Shares by the Underwriters, directly or
indirectly, (i) sell, offer, contract to sell, make any short sale, pledge,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing agreement shall not apply to an aggregate of 50,000
shares of Common Stock held by the executive officers and directors of the
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<PAGE> 13
Company. Each such person or entity shall also agree and consent to the entry
of stop transfer instructions with the Company's transfer agent against the
transfer of shares of Common Stock held by such person or entity, except in
compliance with the foregoing restriction.
(h) The Company shall not, during the 90 days following the
effective date of the Registration Statement, except with your prior written
consent as Representatives, file a registration statement covering any of its
shares of capital stock, except that one or more registration statements on
Form S-8 may be filed at any time following the effective date of the
Registration Statement.
(i) The Company shall not, during the 90 days following the
commencement of the public offering of the Shares by the Underwriters, directly
or indirectly, (i) sell, offer, contract to sell, make any short sale, pledge,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to (A) the Shares to be sold
to the Underwriters pursuant to this Agreement and the Johnson & Johnson
Shares, (B) shares of Common Stock issued by the Company upon the exercise of
options granted under the stock option plans of the Company (the "Option
Plans") or upon the exercise of warrants outstanding as of the date hereof, all
described in footnote (1) to the table under the caption "Capitalization" in
the Preliminary Prospectus, (C) grants of options to purchase Common Stock
granted under the Option Plans and Common Stock issuable upon the exercise of
such options , and (D) shares of Common Stock issuable pursuant to the
Company's Employee Stock Purchase Plan.
(j) The Company will apply the net proceeds from the sale of
the Shares being sold by it in the manner set forth under the caption "Use of
Proceeds" in the Prospectus.
(k) The Company will maintain a Transfer Agent and, if
necessary under the jurisdiction of incorporation of the Company, a Registrar
(which may be the same entity as the Transfer Agent) for its Common Stock.
(l) The Company will use its best efforts to maintain listing
of its shares of Common Stock on The Nasdaq National Market.
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<PAGE> 14
(m) The Company is familiar with the Investment Company Act of
1940, as amended, and the rules and regulations thereunder, and has in the past
conducted its affairs, and will in the future conduct its affairs, in such a
manner so as to ensure that the Company was not and will not be an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
and the rules and regulations thereunder.
(n) If at any time during the 180-day period after the
Registration Statement becomes effective, any rumor, publication or event
relating to or affecting the Company shall occur as a result of which in your
reasonable opinion the market price of the Common Stock has been or is likely
to be materially affected (regardless of whether such rumor, publication or
event necessitates a supplement to or amendment of the Prospectus), the Company
will, after written notice from you advising the Company to the effect set
forth above consult with you in good faith regarding the necessity of
disseminating a press release or other public statement responding to or
commenting on such rumor, publication or event and, if the Company in its
reasonable judgment determines that such a press release or other public
statement is appropriate, the substance of any press release or other public
statement.
7. EXPENSES.
The Company agrees with each Underwriter that:
(a) The Company will pay and bear all costs, fees and expenses
in connection with the preparation, printing and filing of the Registration
Statement (including financial statements, Preliminary Prospectuses and the
Prospectus and any amendments or supplements thereto); the reproduction of this
Agreement, the Preliminary Blue Sky Memoranda and any Supplemental Blue Sky
Memoranda and any instruments related to any of the foregoing; the issuance and
delivery of the Shares hereunder to the several Underwriters, including
transfer taxes, if any; the cost of all stock certificates representing the
Shares and Transfer Agents' and Registrars' fees; the fees and disbursements of
corporate, patent and regulatory counsel for the Company; all fees and other
charges of the Company's independent public accountants; the cost of furnishing
to the several Underwriters copies of the Registration Statement (including
appropriate exhibits), Preliminary Prospectuses and the Prospectus, and any
amendments or supplements to any of the foregoing; NASD filing fees and
expenses incident to securing any required review and the cost of qualifying
the Shares under the laws of such jurisdictions within the United States as you
may designate (including filing fees and fees and disbursements of
Underwriters' Counsel in connection with such NASD filings and Blue Sky
qualifications); listing application fees of the Nasdaq National Market; and
all other
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<PAGE> 15
expenses directly incurred by the Company in connection with the performance of
its obligations hereunder.
(b) If the transactions contemplated hereby are not
consummated by reason of any failure, refusal or inability on the part of the
Company to perform any agreement on its part to be performed hereunder or to
fulfill any condition of the Underwriters' obligations hereunder, the Company
will, in addition to paying the expenses described in clause (a) above,
reimburse the several Underwriters for all out-of-pocket expenses (including
reasonable fees and disbursements of Underwriters' Counsel) incurred by the
Underwriters in reviewing the Registration Statement and the Prospectus and in
otherwise investigating, preparing to market or marketing the Shares. The
Company will in no event be liable to any of the several Underwriters for any
loss of anticipated profits from the sale by them of the Shares.
8. CONDITIONS OF UNDERWRITERS' OBLIGATIONS.
The obligations of the several Underwriters to purchase and pay for the Shares,
as provided herein, shall be subject to the accuracy, as of the date hereof and
the Closing Date and any later Option Closing Date, as the case may be, of the
representations and warranties of the Company herein, to the performance by the
Company of its obligations hereunder and to the following additional
conditions:
(a) The Registration Statement shall have become effective not
later than [9:00 a.m., New York City time], on the date following the date of
this Agreement, or such later time or date as shall be consented to in writing
by you. If the filing of the Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b) and Rule 430A of the Rules and Regulations,
the Prospectus shall have been filed in the manner and within the time period
required by Rule 424(b) and Rule 430A of the Rules and Regulations. No stop
order suspending the effectiveness of the Registration Statement shall have
been issued and no proceeding for that purpose shall have been initiated or, to
the knowledge of the Company or any Underwriter, threatened by the Commission,
and any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
complied with to the reasonable satisfaction of Underwriters' Counsel.
(b) All corporate proceedings and other legal matters in
connection with this Agreement, the form of Registration Statement and the
Prospectus, and the registration, authorization, issue, sale and delivery of
the Shares shall have been reasonably satisfactory to Underwriters' Counsel,
and such counsel shall have been furnished with such papers and information as
they may reasonably have requested to enable them to pass upon the matters
referred to in this subsection.
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(c) The Company shall have issued and sold at least $[14.5]
million of the Johnson & Johnson Shares (________ shares) to JJDC.
(d) You shall have received, at no cost to you, on the Closing
Date and on any later Option Closing Date, as the case may be, the opinions of
(i) Cooley Godward LLP, corporate counsel to the Company and (ii) Bradford J.
Duft, patent counsel to the Company, dated the Closing Date or such later
Option Closing Date, in the forms attached hereto as Appendix A and Appendix B,
respectively, addressed to the Underwriters and with reproduced copies of
signed counterparts thereof for each of the Representatives.
(e) You shall have received from Davis Polk & Wardwell,
Underwriters' Counsel, an opinion or opinions, dated the Closing Date or on any
later Option Closing Date, as the case may be, in form and substance reasonably
satisfactory to you, and the Company shall have furnished to such counsel such
documents as it may have reasonably requested for the purpose of enabling it to
pass upon such matters.
(f) You shall have received on the Closing Date and on any
later Option Closing Date, as the case may be, a letter from Ernst & Young LLP
addressed to the Company and the Underwriters, dated the Closing Date or such
later Option Closing Date, as the case may be, confirming that it is an
independent certified public accountant with respect to the Company within the
meaning of the Act and the Rules and Regulations thereunder and based upon the
procedures described in its letter delivered to you concurrently with the
execution of this Agreement (herein called the "Original Letter"), but carried
out to a date not more than three days prior to the Closing Date or any such
later Option Closing Date, as the case may be, (i) confirming that the
statements and conclusions set forth in the Original Letter are accurate as of
the Closing Date or such later Option Closing Date, as the case may be; and
(ii) setting forth any revisions and additions to the statements and
conclusions set forth in the Original Letter that are necessary to reflect any
changes in the facts described in the Original Letter since the date of such
letter, or to reflect the availability of more recent financial statements,
data or information. The letter shall not disclose any change, or any
development involving a prospective change, in or affecting the business or
properties of the Company or Amylin Europe which, in your reasonable judgment,
makes it impracticable or inadvisable to proceed with the public offering of
the Shares as contemplated by the Prospectus.
(g) You shall have received on the Closing Date and on any
later Option Closing Date, as the case may be, a certificate of the President
and the Chief Financial Officer of the Company, dated the Closing Date or such
later date, to the effect that as of such date (and you shall be satisfied that
as of such date):
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<PAGE> 17
(i) The representations and warranties of the Company
in this Agreement are true and correct, as if made on and as of the
Closing Date or any later Option Closing Date, as the case may be; and
the Company has complied with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied at or prior
to the Closing Date or any later Option Closing Date, as the case may
be;
(ii) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness of the
Registration Statement or preventing or suspending the use of the
Prospectus has been issued, and no proceedings for that purpose have
been instituted or are pending or, to the best of their knowledge,
threatened under the Act;
(iii) They have carefully reviewed the Registration
Statement and the Prospectus; and, when the Registration Statement
became effective and at all times subsequent thereto up to the
delivery of such certificate, the Registration Statement and the
Prospectus and any amendments or supplements thereto contained all
statements and information required to be included therein or
necessary to make the statements therein not misleading; and when the
Registration Statement became effective, and at all times subsequent
thereto up to the delivery of such certificate, none of the
Registration Statement, the Prospectus or any amendment or supplement
thereto included any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading; and, since the effective
date of the Registration Statement, there has occurred no event
required to be set forth in an amended or supplemented Prospectus that
has not been so set forth; and
(iv) Subsequent to the respective dates as of which
information is given in the Registration Statement and the Prospectus,
there has not been (A) any material adverse change in the properties
or assets described or referred to in the Registration Statement and
the Prospectus or in the condition (financial or otherwise),
operations, business or prospects of the Company and Amylin Europe,
(B) any transaction which is material to the Company and Amylin
Europe, except transactions entered into in the ordinary course of
business, (C) any obligation, direct or contingent, incurred by the
Company or Amylin Europe, which is material to the Company and Amylin
Europe taken as a whole, (D) any change in the capital stock or
outstanding indebtedness of the Company or Amylin Europe which is
material to the Company and Amylin Europe taken as a whole or (E) any
dividend or distribution of any kind declared, paid or made on the
capital stock of the Company.
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(h) The Company shall have furnished to you such further
certificates and documents as you shall reasonably request as to the accuracy
of the representations and warranties of the Company herein, as to the
performance by the Company of its obligations hereunder and as to the other
conditions concurrent and precedent to the obligations of the Underwriters
hereunder.
(i) The Firm Shares and the Option Shares, if any, shall have
been approved for designation upon notice of issuance on the Nasdaq National
Market.
(j) On or prior to the Closing Date, you shall have received
from all directors and executive officers of the Company and from JJDC
agreements, in form reasonably satisfactory to UBS Securities LLC, stating that
such person or entity will not, for a period of 90 days following the
commencement of the public offering of the Shares by the Underwriters, directly
or indirectly, (i) sell, offer, contract to sell, make any short sale, pledge,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of any shares of Common Stock or any securities convertible into or
exchangeable or exercisable for or any rights to purchase or acquire Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole
or in part, any of the economic consequences of ownership of Common Stock,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing agreements do not apply to an aggregate of 50,000
shares of Common Stock held by the executive officers and directors of the
Company.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
to Underwriters' Counsel. The Company will furnish you with such number of
conformed copies of such opinions, certificates, letters and documents as you
shall reasonably request.
9. INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to the provisions of paragraph (f) below, the
Company agrees to indemnify and hold harmless each Underwriter and each person
(including each partner or officer thereof) who controls any Underwriter within
the meaning of Section 15 of the Act from and against any and all losses,
claims, damages or liabilities, joint or several, to which such indemnified
parties or any of them may become subject under the Act, the Exchange Act, or
the common law or otherwise, and the Company agrees to reimburse each such
Underwriter and controlling person for any legal or other out-of-pocket
expenses (including, except as otherwise hereinafter provided, reasonable fees
and disbursements of counsel) incurred by the respective indemnified parties in
connection with defending against
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any such losses, claims, damages or liabilities or in connection with any
investigation or inquiry of, or other proceeding which may be brought against,
the respective indemnified parties, in each case arising out of or based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (including the Prospectus as part
thereof and any 462(b) registration statement) or any post-effective amendment
thereto (including any 462(b) registration statement), or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, or (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus or the Prospectus (as amended or as supplemented if the
Company shall have filed with the Commission any amendment thereof or
supplement thereto) or the omission or alleged omission to state therein a
material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that (1) the indemnity agreements of the Company contained in this
paragraph (a) shall not apply to any such losses, claims, damages, liabilities
or expenses if such statement or omission is contained in the section of the
Prospectus entitled "Underwriting" (except for the ____ paragraph thereof) or
the last paragraph of text on the cover page of the Prospectus, and (2) the
indemnity agreement contained in this paragraph (a) with respect to any
Preliminary Prospectus shall not inure to the benefit of any Underwriter from
whom the person asserting any such losses, claims, damages, liabilities or
expenses purchased the Shares which is the subject thereof (or to the benefit
of any person controlling such Underwriter) if at or prior to the written
confirmation of the sale of such Shares a copy of the Prospectus (or the
Prospectus as amended or supplemented) was not sent or delivered to such person
(excluding any documents incorporated by reference) and the untrue statement or
omission of a material fact contained in such Preliminary Prospectus was
corrected in the Prospectus (or the Prospectus as amended or supplemented)
unless the failure is the result of noncompliance by the Company with paragraph
(a) of Section 6 hereof. The indemnity agreements of the Company contained in
this paragraph (a) and the representations and warranties of the Company
contained in Section 2 hereof shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of any indemnified
party and shall survive the delivery of any payment for the Shares.
(b) Each Underwriter severally agrees to indemnify and hold
harmless the Company, each of its executive officers, each of its directors,
each other Underwriter and each person (including each partner or officer
thereof) who controls the Company or any such other Underwriter within the
meaning of Section 15 of the Act, from and against any and all losses, claims,
damages or liabilities, joint or several, to which such indemnified parties or
any of them may become subject under the Act, the Exchange Act, or the common
law or otherwise
19
<PAGE> 20
and to reimburse each of them for any legal or other expenses including, except
as otherwise hereinafter provided, reasonable fees and disbursements of
counsel) incurred by the respective indemnified parties in connection with
defending against any such losses, claims, damages or liabilities or in
connection with any investigation or inquiry of, or other proceeding which may
be brought against, the respective indemnified parties, in each case arising
out of or based upon (i) any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (including the Prospectus
as part thereof and any Rule 462(b) registration statement) or any
post-effective amendment thereto (including any 462(b) registration statement)
or the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading
or (ii) any untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or the Prospectus (as amended or as
supplemented if the Company shall have filed with the Commission any amendment
thereof or supplement thereto) or the omission or alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
provided, however, that in the cases of clauses (i) and (ii) above, such
statement or omission is contained in the Section of the Prospectus entitled
"Underwriting" [(except for the ____ paragraph thereof)] or the last paragraph
on the cover page of the Prospectus. The indemnity agreement of each
Underwriter contained in this paragraph (b) shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of any
indemnified party and shall survive the delivery of and payment for the Shares.
(c) Each party indemnified under the provision of paragraphs
(a) and (b) of this Section 9 agrees that, upon the service of a summons or
other initial legal process upon it in any action or suit instituted against it
or upon its receipt of written notification of the commencement of any
investigation or inquiry of, or proceeding against it, in respect of which
indemnity may be sought on account of any indemnity agreement contained in such
paragraphs, it will promptly give written notice (a "Notice") of such service
or notification to the party or parties from whom indemnification may be sought
hereunder. No indemnification provided for in such paragraphs shall be
available to any party who shall fail so to give the Notice if the party to
whom such Notice was not given was unaware of the action, suit, investigation,
inquiry or proceeding to which the Notice would have related and was prejudiced
by the failure to give the Notice, but the omission so to notify such
indemnifying party or parties of any such service or notification shall not
relieve such indemnifying party or parties from any liability which it or they
may have to the indemnified party for contribution or otherwise than on account
of such indemnity agreement. Any indemnifying
20
<PAGE> 21
party shall be entitled at its own expense to participate in the defense of any
action, suit or proceeding against, or investigation or inquiry of, an
indemnified party. Any indemnifying party shall be entitled, if it so elects
within a reasonable time after receipt of the Notice by giving written notice
(the "Notice of Defense") to the indemnified party, to assume (alone or in
conjunction with any other indemnifying party or parties) the entire defense of
such action, suit, investigation, inquiry or proceeding, in which event such
defense shall be conducted, at the expense of the indemnifying party or
parties, by counsel chosen by such indemnifying party or parties and reasonably
satisfactory to the indemnified party or parties; provided, however, that (i)
if the indemnified party or parties reasonably determine that there may be a
conflict between the positions of the indemnifying party or parties and of the
indemnified party or parties in conducting the defense of such action, suit,
investigation, inquiry or proceeding or that there may be legal defenses
available to such indemnified party or parties different from or in addition to
those available to the indemnifying party or parties, then counsel for the
indemnified party or parties shall be entitled to conduct the defense to the
extent reasonably determined by such counsel to be necessary to protect the
interests of the indemnified party or parties and (ii) in any event, the
indemnified party or parties shall be entitled, at its or their own expense to
have counsel chosen by such indemnified party or parties participate in, but
not conduct, the defense. It is understood that the indemnifying parties shall
not, in respect of the legal defenses of any indemnified party in connection
with any proceeding or related proceedings in the same jurisdiction, be liable
for (a) the fees and expenses of more than one separate firm (in addition to
any local counsel) for all of the Underwriters and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the Act, and (b)
the fees and expenses of more than one separate firm (in addition to any local
counsel) for the Company, its directors, its officers who sign the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act. If, within a reasonable time after receipt of the
Notice, an indemnifying party gives a Notice of Defense and the counsel chosen
by the indemnifying party or parties is reasonably satisfactory to the
indemnified party or parties, the indemnifying party or parties will not be
liable under paragraphs (a) through (c) of this Section 9 for any legal or
other expenses subsequently incurred by the indemnified party or parties in
connection with the defense of the action, suit, investigation, inquiry or
proceeding, except that (a) the indemnifying party or parties shall bear the
legal and other expenses incurred in connection with the conduct of the defense
as referred to in clause (i) of the proviso to the preceding sentence and (B)
the indemnifying party or parties shall bear such other expenses as it or they
have authorized to be incurred by the indemnified party or parties. If, within
a reasonable time after receipt of the Notice, no Notice of Defense has been
given, the indemnifying party or parties shall be responsible for any legal or
other expenses incurred by the indemnified party or parties in connection with
the defense of the action, suit, investigation, inquiry or proceeding. The
indemnifying party or parties shall not be liable for any settlement of any
proceeding effected
21
<PAGE> 22
without its or their written consent, provided such consent has not been
unreasonably withheld.
(d) If the indemnification provided for in this Section 9 is
unavailable or insufficient to hold harmless an indemnified party under
paragraph (a) or (b) of this Section 9, then each indemnifying party shall, in
lieu of indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in paragraph (a) or (b) of this Section 9 (i) in such
proportion as is appropriate to reflect the relative benefits received by each
indemnifying party from the offering of the Shares or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of each indemnifying party
in connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, or actions in respect thereof, as well as any
other relevant equitable considerations. The relative benefits received by the
Company, on the one hand, and the Underwriters, on the other, shall be deemed
to be in the same respective proportions as the total net proceeds from the
offering of the Shares received by the Company and the total underwriting
discount received by the Underwriters, as set forth in the table on the cover
page of the Prospectus, bear to the aggregate public offering price of the
Shares. Relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to
information supplied by each indemnifying party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
The parties agree that it would not be just and equitable if
contributions pursuant to this paragraph (d) were to be determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take into account
the equitable considerations referred to in the first sentence of this
paragraph (d). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities, or actions in respect thereof, referred
to in the first sentence of this paragraph (d) shall be deemed to include any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigation, preparation to defend or defense against any
action or claim which is the subject of this paragraph (d). Notwithstanding
the provisions of this paragraph (d), no Underwriter shall be required to
contribute any amount in excess of the underwriting discount applicable to the
Shares purchased by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
22
<PAGE> 23
misrepresentation. The Underwriters' obligations in this paragraph (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
Each party entitled to contribution agrees that upon the
service of a summons or other initial legal process upon it in any action
instituted against it in respect of which contribution may be sought, it will
promptly give written notice of such service to the party or parties from whom
contribution may be sought, but the omission so to notify such party or parties
of any such service shall not relieve the party from whom contribution may be
sought from any obligation it may have hereunder or otherwise (except as
specifically provided in paragraph (c) of this Section 9).
(e) The Company will not, without the prior written consent of
each Underwriter, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding in respect of
which indemnification may be sought hereunder (whether or not such Underwriter
or any person who controls such Underwriter within the meaning of Section 15 of
the Act or Section 20 of the Exchange Act is a party to such claim, action,
suit or proceeding) unless such settlement, compromise or consent includes an
unconditional release of such Underwriter and each such controlling person from
all liability arising out of such claim, action, suit or proceeding.
(f) The parties to this Agreement hereby acknowledge that they
are sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including without limitation the
provisions of this Section 9 and are fully informed regarding said provisions.
They further acknowledge that the provisions of this Section 9 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement and Prospectus as required by the Act and the Exchange
Act.
10. TERMINATION. This Agreement may be terminated by you at any
time on or prior to the Closing Date or on or prior to any later Option Closing
Date, as the case may be, (i) if the Company shall have failed, refused or been
unable, at or prior to the Closing Date, or on or prior to any later Option
Closing Date, as the case may be, to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company is not fulfilled, or (ii) if
trading on the New York Stock Exchange, the American Stock Exchange or the
Nasdaq National Market shall have been suspended, or minimum or maximum prices
for trading shall have been fixed, or maximum ranges for prices for securities
shall have been required on the New York Stock Exchange, the American Stock
Exchange or the Nasdaq National
23
<PAGE> 24
Market, by such trading exchanges or by order of the Commission or any other
governmental authority having jurisdiction, or if a banking moratorium shall
have been declared by federal or New York authorities, or (iii) if the Company
shall have sustained a loss by strike, fire, flood, accident or other calamity
of such character as to have a Material Adverse Effect regardless of whether or
not such loss shall have been insured, or (iv) if there shall have been a
material adverse change in the general political or economic conditions or
financial markets in the United States as in the judgment of the
Representatives makes it inadvisable or impracticable to proceed with the
offering, sale and delivery of the Shares, or (v) if there shall have occurred
an outbreak or escalation of hostilities between the United States and any
foreign power or of any other insurrection or armed conflict involving the
United States or other national or international calamity, hostilities or
crisis or the declaration by the United States of a national emergency which,
in the judgment of the Representatives, adversely affects the marketability of
the Shares, or (vi) if since the respective dates as of which information is
given in the Registration Statement and the Prospectus, there shall have
occurred any material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or otherwise,
of the Company or the business affairs, management, or business prospects of
the Company, whether or not arising in the ordinary course of business, or
(vii) if any foreign, federal or state statute, regulation, rule or order of
any court or other governmental authority shall have been enacted, published,
decreed or otherwise promulgated which in the judgment of the Representatives
materially and adversely affects or will materially and adversely affect the
business or operations of the Company, or trading in the Common Stock shall
have been suspended, or (viii) there shall have occurred a material adverse
decline in the value of securities generally on the New York Stock Exchange,
the American Stock Exchange or the Nasdaq National Market or (ix) action shall
be taken by any foreign, federal, state or local government or agency in
respect of its monetary or fiscal affairs which, in the judgment of the
Representatives, has a material adverse effect on the securities markets in the
United States. If this Agreement shall be terminated in accordance with this
Section 10, there shall be no liability of the Company to the Underwriters and
no liability of the Underwriters to the Company; provided, however, that in the
event of any such termination the Company agrees to indemnify and hold harmless
the Underwriters from all costs or expenses incident to the performance of the
obligations of the Company under this Agreement, including all costs and
expenses referred to in Section 7.
If you elect to terminate this Agreement as provided in this Section
10, the Company shall be notified promptly by you by telephone, telecopy or
telegram, confirmed by letter.
24
<PAGE> 25
11. REIMBURSEMENT OF CERTAIN EXPENSES.
(a) In addition to their other obligations under Section 9 of
this Agreement, the Company hereby agrees to reimburse on a quarterly basis the
Underwriters for all reasonable legal and other expenses incurred in connection
with investigating or defending any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (a) of Section 9 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the persons receiving such payments shall promptly refund them and
(ii) such persons shall provide to the Company, upon request, reasonable
assurances of their ability to effect any refund, when and if due.
(b) In addition to their other obligations under Section 9 of
this Agreement, the Underwriters hereby agree to reimburse on a quarterly basis
the Company for all reasonable legal and other expenses incurred in connection
with investigating or defending any claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in paragraph (b) of Section 9 of this
Agreement, notwithstanding the absence of a judicial determination as to the
propriety and enforceability of the obligations under this Section 11 and the
possibility that such payments might later be held to be improper; provided,
however, that (i) to the extent any such payment is ultimately held to be
improper, the Company shall promptly refund it and (ii) the Company shall
provide to the Underwriter, upon request, reasonable assurances of its ability
to effect any refund, when and if due.
12. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall
inure to the benefit of the Company and the several Underwriters and, with
respect to the provisions of Section 9 hereof, the several parties (in addition
to the Company and the several Underwriters) indemnified under the provisions
of said Section 9, and their respective personal representatives, successors
and assigns. Nothing in this Agreement is intended or shall be construed to
give to any other person, firm or corporation any legal or equitable remedy or
claim under or in respect of this Agreement or any provision herein contained.
The term "successors and assigns" as herein used shall not include any
purchaser, as such purchaser, of any of the Shares from any of the several
Underwriters
13. NOTICES. Except as otherwise provided herein, all communications
hereunder shall be in writing or by telegraph and, if to the Underwriters,
shall be mailed, telegraphed or delivered to UBS Securities LLC, 299 Park
Avenue, New
25
<PAGE> 26
York, NY 10171, Attention: Mr. Richard Messina; and if to the Company, shall be
mailed, telegraphed or delivered to it at its office, 9373 Towne Center Drive,
San Diego, California 92121 Attention: Chief Financial Officer. All notices
given by telegraph shall be promptly confirmed by letter.
14. MISCELLANEOUS. The reimbursement, indemnification and
contribution agreements contained in this Agreement and the representations,
warranties and covenants in this Agreement shall remain in full force and
effect regardless of (i) any investigation made by or on behalf of any
Underwriter or controlling person thereof, or by or on behalf of the Company or
its respective directors of officers, and (ii) delivery of and payment for the
Shares under this Agreement[; provided however, that if this Agreement is
terminated prior to the Closing Date, the provisions of paragraph (k) of
Section 6 hereof shall be of no further force or effect].
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
You will act as Representatives of the several Underwriters in all
dealings with the Company under this Agreement, and any action under or in
respect of this Agreement taken by you jointly or by UBS Securities LLC, as
Representatives, will be binding upon all of the Underwriters.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
26
<PAGE> 27
Please sign and return to the Company the enclosed duplicates of this
letter, whereupon this letter will become a binding agreement among the Company
and the several Underwriters in accordance with its terms.
Very truly yours,
AMYLIN PHARMACEUTICALS, INC.
By:
---------------------------------
[Name]
[Title]
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
UBS SECURITIES LLC
HAMBRECHT & QUIST LLC
VECTOR SECURITIES INTERNATIONAL, INC.
By: UBS SECURITIES LLC
By:
----------------------------------
Title:
Acting on behalf of the several
Underwriters, including themselves,
named on Schedule A hereto.
27
<PAGE> 28
SCHEDULE A
UNDERWRITERS
<TABLE>
<CAPTION>
Number of Shares
Underwriters to be Purchased
------------------ ---------------------
<S> <C>
UBS Securities LLC . . . . . . . . . . . . . . . . . . . . . . . .
Hambrecht & Quist . . . . . . . . . . . . . . . . . . . . . . . . .
Vector Securities International, Inc. . . . . . . . . . . . . . . .
Total
=============
</TABLE>
<PAGE> 29
SCHEDULE B
Lock-Up Agreements
<PAGE> 30
APPENDIX A
MATTERS TO BE COVERED IN THE OPINION OF
COOLEY GODWARD LLP
COUNSEL FOR THE COMPANY
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified as a foreign corporation and in good standing
in each state of the United States of America in which its ownership or leasing
of property requires such qualification (except where the failure to be so
qualified would not have a material adverse effect on the business, properties,
financial condition or results of operations of the Company and Amylin Europe,
taken as a whole), and has full corporate power and authority to own or lease
its properties and conduct its business as described in the Registration
Statement.
(ii) the authorized capital stock of the Company consists of 7,500,000
shares of Preferred Stock, par value $.001 per share, and 50,000,000 shares of
Common Stock, par value $.001 per share; proper corporate proceedings have been
taken validly to authorize such authorized capital stock; all of the
outstanding shares of such capital stock (including the Firm Shares, the
Johnson & Johnson Shares and the Option Shares issued, if any) have been duly
and validly issued and are fully paid and nonassessable; any Option Shares or
Johnson & Johnson Shares purchased after the Closing Date, when issued and
delivered to and paid for by the Underwriters as provided in the Underwriting
Agreement, will have been duly and validly issued and be fully paid and
nonassessable; and no preemptive rights of, or rights of refusal in favor of,
stockholders exist with respect to the Shares, or the issue and sale thereof,
pursuant to the Certificate of Incorporation or Bylaws of the Company and, to
the knowledge of such counsel, there are no contractual preemptive rights that
have not been waived, rights of first refusal or rights of co-sale which exist
with respect to the issue and sale of the Shares;
(iii) the Registration Statement has become effective under the
Securities Act and, to the best of such counsel's knowledge, no stop order
suspending the effectiveness of the Registration Statement or suspending or
preventing the use of the Prospectus is in effect and no proceedings for that
purpose have been instituted or are pending or contemplated by the Commission;
(iv) the Registration Statement and the Prospectus (except as to the
financial statements and schedules and other financial data contained therein,
as to which such counsel need express no opinion) comply as to form in all
material respects with the requirements of the Act, the Exchange Act and with
the
A-1
<PAGE> 31
rules and regulations of the Commission thereunder;
(v) such counsel have no reason to believe that the Registration
Statement (except as to the financial statements and schedules and other
financial and statistical data contained or incorporated by reference therein,
as to which such counsel need not express any opinion or belief) at the
Effective Date contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus (except as to the
financial statements and schedules and other financial and statistical data
contained or incorporated by reference therein, as to which such counsel need
not express any opinion or belief) as of its date or at the Closing Date (or
any later date on which Option Shares are purchased), contained or contains any
untrue statement of a material fact or omitted or omits to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(vi) the information required to be set forth in the Registration
Statement in answer to Items 9 and 10 (insofar as it relates to such counsel)
of Form S-3 is to the best of such counsel's knowledge accurately and
adequately set forth therein in all material respects or no response is
required with respect to such Items, and, the description of the Company's
stock option plans set forth or incorporated by reference in the Prospectus
accurately and fairly presents the information required to be shown with
respect to said plans to the extent required by the Securities Act and the
rules and regulations of the Commission thereunder;
(vii) such counsel do not know of any franchises, contracts, leases,
documents or legal proceedings, pending or threatened, which in the opinion of
such counsel are of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement, which are not described and filed as required;
(viii) the Underwriting Agreement has been duly authorized, executed
and delivered by the Company;
(ix) the issue and sale by the Company of the shares of Common Stock
sold by the Company as contemplated by the Underwriting Agreement will not
conflict with, or result in a breach of, the Certificate of Incorporation or
Bylaws of the Company or, to the best of such counsel's knowledge, any
agreement or instrument attached as an exhibit or incorporated by reference as
an exhibit to any of the Company's public documents filed with the Commission
pursuant to the Exchange Act to which the Company is a party or any applicable
law or regulation, or so far as is
A-2
<PAGE> 32
known to such counsel, any order, writ, injunction or decree, of any
jurisdiction, court or governmental instrumentality;
(x) to the best of such counsel's knowledge, all holders of securities
of the Company having rights to the registration of shares of Common Stock, or
other securities, because of the filing of the Registration Statement by the
Company have waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the Registration
Statement;
(xi) no consent, approval, authorization or order of any court or
governmental agency or body is required for the consummation of the
transactions contemplated in the Underwriting Agreement, except such as have
been obtained under the Act and such as may be required under state securities
or blue sky laws in connection with the purchase and distribution of the Shares
by the Underwriters; and
(xii) the Shares and the Johnson & Johnson Shares issued and sold by
the Company will been duly authorized for inclusion on The Nasdaq National
Market upon official notice of issuance.
____________________________________
Counsel rendering the foregoing opinion may rely as to questions of law not
involving the laws of the United States, the General Corporate Law of the State
of Delaware or the laws of the State of California, upon opinions of local
counsel satisfactory in form and scope to counsel for the Underwriters. Copies
of any opinions so relied upon shall be delivered to the Representatives and to
counsel for the Underwriters and the foregoing opinion shall also state that
counsel knows of no reason the Underwriters are not entitled to rely upon the
opinions of such local counsel.
In addition, the foregoing opinion may contain such qualifications as are
required by the opinion committee of the counsel rendering such opinion and as
are reasonable to counsel for the Underwriters.
A-3
<PAGE> 33
APPENDIX B
MATTERS TO BE COVERED IN THE OPINION OF BRADFORD J. DUFT
PATENT COUNSEL FOR THE COMPANY
Such counsel is familiar with the technology used by the Company in
its business and the manner of its use thereof and have read the Registration
Statement and the Prospectus, including particularly the portions of the
Registration Statement and the Prospectus referring to patents, trade secrets,
trademarks, service marks or other proprietary information or materials and:
(i) based on the information brought to such counsel's
attention by the Company with respect to the Company's investigation,
if any, of the published literature and patent references relating to
the inventions claimed in its patent applications, such counsel
disclosed all references known to it to the Patent and Trademark
Office in accordance with 37 C.F.R. Section 1.56; to the best of such
counsel's knowledge, all information submitted to the U.S. Patent and
Trademark Office in the relevant applications, and in connection with
the prosecution of the relevant applications, was accurate; neither
such counsel, nor to the best of its knowledge, the Company, made any
misrepresentation or concealed any material information from the
Patent and Trademark Office in any of such applications, or in
connection with the prosecution of such applications in violation of
37 C.F.R. Section 1.56;
(ii) the statements in the Prospectus under the headings "Risk
Factors - Patents and Proprietary Rights" and "Business - Patents,
Proprietary Rights and Licenses" constitute an accurate summary of the
matters referred to therein and fairly present the information called
for with respect to such matters; and
(iii) other than as disclosed in the Prospectus, to the best
of such counsel's knowledge, the Company has not received any notice
of infringement of or conflict with asserted rights of any third party
with respect to any material patents, trademarks, licenses, copyright
and proprietary or other confidential information employed by the
Company in connection with its business.
With respect to subparagraph (i) above, Bradford J. Duft may state that he has
not independently conducted any investigation of the published literature and
patent references relating to the inventions claimed in the Company's patent
applications.
B-1
<PAGE> 1
EXHIBIT 5.1
[COOLEY GODWARD LLP LETTERHEAD]
October 15, 1996
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive
San Diego, CA 92121
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by Amylin Pharmaceuticals, Inc. (the "Company") of a
Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission, including a related prospectus filed with
the Registration Statement (the "Prospectus"), and the public offering of up to
1,725,000 shares of the Company's common stock, including 225,000 shares
issuable upon exercise of an over-allotment option by the underwriters
(collectively, the "Shares").
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Amended and
Restated Certificate of Incorporation and Bylaws, as amended, and the originals
or copies certified to our satisfaction of such records, documents,
certificates, memoranda and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below. We have
assumed that the Shares will be sold at a price authorized by the Board of
Directors of the Company or a Pricing Committee of the Board.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares, when sold and issued in accordance with the Registration
Statement and related Prospectus, will be validly issued, fully paid, and
nonassessable.
We consent to the reference to our firm under the caption "Legal Matters" in
the Prospectus included in the Registration Statement and to the filing of this
opinion as an exhibit to the Registration Statement.
Very truly yours,
COOLEY GODWARD LLP
By: /s/ Thomas A. Coll
----------------------------
Thomas A. Coll
<PAGE> 1
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Selected
Consolidated Financial Data" and "Experts" in the Registration Statement (Form
S-3) and related Prospectus of Amylin Pharmaceuticals, Inc. for the registration
of shares of its common stock and to the incorporation by reference therein of
our report dated January 18, 1996, with respect to the consolidated financial
statements of Amylin Pharmaceuticals, Inc. incorporated by reference in its
Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
San Diego, California
October 11, 1996
<PAGE> 1
Exhibit 23.3
[LYON & LYON LLP LETTERHEAD]
CONSENT OF
LYON & LYON LLP, PATENT COUNSEL
October 15, 1996
The Board of Directors and Stockholders
Amylin Pharmaceuticals, Inc.
We have reviewed and approved the statements in your Registration
Statement (form S-3 dated October 15, 1996) under the captions "Risk
Factors--Patents and Proprietary Rights" and "Business--Patents, Proprietary
Rights, and Licenses," and we consent to the reference to our firm in this
regard under the caption "EXPERTS" and to the use of our name wherever
appearing in the Registration Statement (Form S-3 dated October 15, 1996) and
related Prospectus of Amylin Pharmaceuticals, and any amendment thereto.
LYON & LYON LLP
